The US is considering cutting off the flow of vital US technology to as many as five Chinese companies, including Hangzhou Hikvision Digital Technology Co (杭州海康威視數字技術), widening the dragnet beyond Huawei Technologies Co (華為) to include world leaders in video surveillance.
The US is deliberating whether to add Hikvision, Zhejiang Dahua Technology Co (浙江大華科技) and several unidentified others to a blacklist that bars them from US components or software, people familiar with the matter said.
US President Donald Trump’s administration is concerned about their role in helping Beijing repress minority Uighurs, they said, asking not to be identified talking about private deliberations.
Photo: EPA-EFE
There is concern also that Hikvision’s or Dahua’s cameras, which come with facial recognition capabilities, could be employed in espionage, the people said.
Such a move would escalate tensions with China and raises questions about whether the US is going after more of the nation’s corporate champions.
The US last week barred Huawei from US technology, a move that pummeled shares in US chipmakers and threatens to dampen global economic growth and disrupt the rollout of 5G networks.
Chinese offshore yuan erased earlier gains after Bloomberg’s report. Shares of Hikvision and Dahua plunged in Shenzhen after the New York Times first reported on the potential ban.
It is unclear which companies might join Huawei on the so-called Entities List, which prohibits the sale of US technology without a special license.
Chinese firms such as Hikvision and Dahua are the world’s largest purveyors of surveillance hardware, while others in China specialize in image processing software.
“We hope the company receives a fair and just treatment,” Hikvision secretary of the board Huang Fanghong (黃方紅) said in a statement.
Dahua representatives had no immediate comment.
The threat would elevate fears in Beijing that Trump’s ultimate goal is to contain China, triggering a cold war between the two.
Washington has also pressured allies and foes alike to avoid using Huawei for 5G networks that are to power everything from self-driving vehicles to robot surgery.
At the heart of Trump’s campaign is suspicion that Chinese firms aid Beijing in global espionage while spearheading its ambitions of becoming a technology superpower.
The US Department of Justice also accuses Huawei of willfully violating sanctions on Iran. Huawei has denied those allegations.
US Senator Marco Rubio and other senators last month sent a letter to US Secretary of State Michael Pompeo and US Secretary of Commerce Wilbur Ross urging them to impose sanctions against officials and firms “complicit in gross violations of human rights” in Xinjiang.
A UN assessment said that tens of thousands to “upwards of 1 million” Uighurs have been detained.
Hikvision — the industry leader — sells its cameras around the world. Its devices use artificial intelligence, enabling them to conduct facial recognition on a vast scale.
That has helped it build a dominant position in a market that BIS Research said was worth US$32 billion in 2017 and would grow 16 percent per year through 2023.
Along with Dahua, it is a constituent of the MSCI Asia Pacific Index and is among Shenzhen stocks most owned by overseas investors.
The Chinese Ministry of Foreign Affairs yesterday said that China opposes the US smearing Chinese companies, after media reports that the US administration is considering Huawei-like sanctions on Hikvision.
China urges the US to provide a fair and non-discriminatory environment for Chinese firms, ministry spokesman Lu Kang (陸慷) told a daily news briefing.
Additional reporting by Reuters
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