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Following Trump’s Executive Order, FTSE Russell Removes Xiaomi and Luokung from FTSE Russell Index

On March 5, Global Index publisher FTSE Russell announced that it will remove the Chinese smartphone manufacturer Xiaomi and tech data company Luokung Technology Corporation from its global indexes. FTSE Russell stated that the decision will take effect on March 12. The decision follows the executive order that the Trump administration signed.

This is the latest development on the issue of Chinese companies that have been delisted from the US and European markets. Earlier this year, the US NASDAQ Index dropped China Mobile, China Telecom, and China Unicom. These are China’s three largest telecommunications companies. On February 26, the New York Stock Exchange also announced the initiation of the delisting of China National Offshore Oil Co., Ltd. (CNOOC), a large Chinese state-owned enterprise, following an executive order that the Trump administration issued.

On November 12, 2020, the Trump administration issued an executive order banning the U.S. investment in Chinese companies that have a Chinese military background or that the military controls. This order went into effect on January 12 this year. Nine Chinese companies, including Xiaomi, Luokung, and Commercial Aircraft of China, have been included in the sanctions list.

Xiaomi argued that it has nothing to do with the Chinese military, and filed a lawsuit against the U.S. Department of Defense and the U.S. Treasury in the U.S. District Court in the District of Columbia. The lawsuit argues that their decision to include Xiaomi on the sanctions list was procedurally unfair and they seek to have these decisions withdrawn.

However, the public information suggests that Xiaomi does have a close relationship with the Chinese military. The founder Lei Jun himself is a PLA veteran. Lei is also an investor in the Yinhe Space Company, whose chief scientist is closely involved in military equipment and technology development.

Source: Voice of America, March 5, 2021