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Xiaomi Raises $1.2 Billion in Debt As Beijing Targets the Tech Sector

Xiaomi Raises $1.2 Billion in Debt As Beijing Targets the Tech Sector

Chinese smartphone giant Xiaomi will raise around $1.2 billion via debt issuance at a time when authorities are cracking down on China’s technology giants.

Xiaomi will issue $800 million worth of bonds due in 2031 with a coupon of 2.875% per year. The proceeds will be used for “general corporate purposes,” according to a regulatory filing.

The electronics maker will also issue $400 million of so-called green bonds with a 4.1% coupon per year. Green bonds are debt issued to raise money to support environmental projects. Xiaomi said the proceeds will go toward funding eligible projects under its “Green Finance Framework,” an environmental scheme.

Xiaomi, the world’s third-largest smartphone maker, has continued to expand globally and is looking at breaking into new areas like electric vehicles. In March, Xiaomi said it would launch its own electric car business and invest $10 billion over the next 10 years.

The money could go toward these initiatives.

Xiaomi’s debt issuance comes as Beijing intensifies scrutiny of the technology sector. Over the past year, the government has introduced a slew of legislation in areas from fintech to antitrust and data protection.

Beijing’s latest target is Didi. After the company went public in the U.S. last month, regulators opened a cybersecurity review into the ride-hailing giant and ordered its removal from China’s app stores.

Xiaomi has previously been caught in the geopolitical tensions between the U.S. and China.

In January, the Trump administration designated Xiaomi as one of several “Communist Chinese military companies” or CCMC. That meant Americans would eventually not be able to hold the company’s stock. Xiaomi challenged the order in court. And in March, a judge blocked the Trump-era order.