The South China Morning Post is reporting that the Biden Administration has removed restrictions that bar US investment into the Chinese technology firm Xiaomi that makes smartphones. The National Development and Reform Commission in China has said that it hopes to broaden access for foreign investment to tap all areas of the Chinese market.
But why were restrictions put into place in the first place? The Trump administration made the claim that the smartphone maker had ties to the communist government of China. That means any investment from the US could be used to advance the communist party’s technology.
The assumption of ties to the government is understandable, as the CCP effectively directs most of the market in China. Also at issue is a Chinese law that requires companies to turn over data to the government. This means that US investors may beĀ assisting the Chinese government’s ability to spy on its own people.
There is concern also that if these products are allowed into the US, the data that is obtained here in the states could be exported to China for their government’s uses.