The United States Department of Defence, blacklists Chinese firms including Xiaomi

The US Department of Defence in a statement said it was "determined to highlight and counter the People's Republic of China's military-civil fusion development strategy".

The outgoing Trump administration on Friday blacklisted Xiaomi Corp which is China's No. 2 smartphone maker including nine other countries barring Americans from investing in them.

US officials said the Chinese firms posed a threat to national security. Xiaomi's shares nosedived 11 per cent after the US government's announcement.

The US Department of Defence in a statement said it was "determined to highlight and counter the People's Republic of China's military-civil fusion development strategy".

The latest move by Trump administration focused on Chinese companies with military ties and strategic value which includes plane maker COMAC. The blacklisting forces American investors to divest their holdings of the firms by November 11, 2021.

The US Commerce Department has also banned Americans from supplying companies including China's oil cooperation CNOOC and deep-water explorer Skyrison which develops military equipment.

"China's reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts are a threat to US national security and the security of the international community," Commerce Secretary Wilbur Ross said in a statement.

"CNOOC acts a bully for the People's Liberation Army to intimidate China's neighbours, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes," Ross added.

"CNOOC has repeatedly harassed and threatened offshore oil and gas exploration and extraction in the South China Sea, with the goal of driving up the political risk for interested foreign partners, including Vietnam," the Commerce Department said.