The Donald Trump administration placed eight Chinese technology giants on a US blacklist on Monday, accusing them of being implicated in human rights violations against Muslim minorities in the country’s far-western region of Xinjiang.
The companies include two video surveillance companies — Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology — that by some accounts control as much as a third of the global market for video surveillance and have cameras all over the world.
Also targeted were SenseTime Group — the world’s most valuable artificial intelligence start-up — and fellow AI giant Megvii Technology, which is said to be aiming to raise up to US$1-billion in a Hong Kong initial public offering. Backed by Chinese e-commerce giant Alibaba Group, the pair are at the forefront of China’s ambition to dominate AI in coming years.
The move, which was announced after US markets closed, came on the same day negotiators from the US and China began working-level preparations for high-level talks due to begin on Thursday in Washington. Entities on the list are prohibited from doing business with American companies without being granted a US government licence, though some have maintained relationships with banned companies through international subsidiaries. Hikvision and Dahua were suspended from trading on Tuesday but iFlytek, one of the eight singled out, slid as much as 3.1% in Shenzhen.
“Specifically, these entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention and high-technology surveillance against Uighurs, Kazakhs and other members of Muslim minority groups” in Xinjiang, the US commerce department said in a federal register notice published on Monday.
New direction
The move, first reported by Reuters, takes President Trump’s economic war against China in a new direction, marking the first time his administration has cited human rights as a reason for action. Past moves to blacklist companies such as Huawei have been taken on national security grounds. The president’s tariff war against Beijing, meanwhile, has been fought over issues such as intellectual property theft and control of technology as well as China’s broader industrial policy.
SenseTime, Dahua and Megvii weren’t immediately available for comment outside of normal business hours. China’s ministry of commerce didn’t immediately respond to a faxed request for comment.
“Hikvision strongly opposes today’s decision by the US government and it will hamper efforts by global companies to improve human rights around the world,” the company said in a statement. “Punishing Hikvision, despite these engagements, will deter global companies from communicating with the US government, hurt Hikvision’s US businesses partners and negatively impact the US economy.”
Besides Hikvision and Dahua, the companies put on the blacklist include artificial intelligence companies iFlytek, Megvii, SenseTime and Yitu Technologies. Also included are Xiamen Meiya Pico Information, which bills itself as an “expert in digital forensics and cybersecurity in China”, according to its website, and Shanghai-based Yixin Science and Technology, a supplier of micro and nano fabrication equipment. — Reported by Shawn Donnan and Jenny Leonard, with assistance from Jennifer A Dlouhy, Justin Sink, Ian King, Candy Cheng, Michael Hytha, Mark Milian, Edwin Chan and James Mayger, (c) 2019 Bloomberg LP
