FTSE Russell, a global securities index provider, announced Friday (March 5) that it has removed Chinese smartphone company Xiaomi and Chinese big data technology company Luogung Technology Corporation from its global index.
FTSE Russell said in the announcement that Xiaomi will be removed from the FTSE Global All Cap Index and the FTSE Global China A Inclusion Indexes, effective from the 12th of this month, in accordance with an executive order issued earlier by the US president. Indexes).
The announcement said Wicker Basket Technologies will also be delisted from the FTSE Global Total Cap Index and the Micro Cap Indexes.
This is the latest development in a string of recent delistings of Chinese companies from the U.S. and European markets. The U.S. Nasdaq removed China Mobile, China Telecom and China Unicom, China’s three largest telecommunications companies, from the index earlier this year. On Feb. 26 this year, the U.S. New York Stock Exchange also announced the initiation of delisting procedures for major Chinese state-owned company China National Offshore Oil Co.
On November 12 of last year, the Trump administration issued an executive order prohibiting anyone in the U.S. from investing in Chinese companies that have a Communist Party military background or are controlled by the military. This order took effect with January 12 of this year. Xiaomi, Basket, China Commercial Aircraft and nine other Chinese companies were included in the sanctions list.
Xiaomi has been arguing that it has no ties to the Communist Party’s military and has sued the U.S. Department of Defense and the U.S. Department of the Treasury in the U.S. District Court for the District of Columbia, arguing that they committed procedural unfairness and factual errors in their decision to place Xiaomi on the sanctions list. Xiaomi’s claim is that the court should declare the decisions of the DOD and the Treasury Department to be wrong and ask them to withdraw their decisions.
However, information that has been made public shows that Xiaomi does have close ties to the Chinese Communist Party military. Company founder Lei Jun himself joined the Chinese People’s Liberation Army and is a retired soldier. In addition, Lei Jun is an investor in Galaxy Aerospace. The chairman of this company’s technical committee, Deng Zongquan, is the chief scientist of the 973 project, a cutting-edge national defense program, and is deeply involved in the development of equipment technology for the Chinese Communist military.
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