US-China tech war: surveillance camera maker Hikvision hopes for ‘fair’ treatment as US reportedly weighs harsh sanctions

·3-min read

Chinese surveillance camera maker Hikvision said it hopes to be “treated fairly” by the US after the Financial Times reported that Washington may impose fresh sanctions on the firm for its alleged involvement in human rights violations in China’s Muslim-majority Xinjiang region.

If the US adds the Hangzhou-based company to its Specially Designated Nationals (SDN) list, which would bar it from dealing with American companies or citizens, it would deal a heavy blow to the global operations of Hikvision, which has been on the so-called US Entity List since October 2019.

The company’s shares tumbled by the daily limit of 10 per cent in Shenzhen on Thursday following the FT report, which cited identified sources as saying that Washington has already begun briefing allies about the sanction plan. Neither the White House or the US Treasury Department, which administers the SDN, has confirmed or denied the report.

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If the sanctions are imposed, it would mark an escalation of US punishment of Chinese tech firms as SDN includes much harsher measures than the Entity List, including freezing of assets in the US and banning the targeted firms from conducting any financial transactions with American citizens or institutions.

In a statement on Thursday, Hikvision said it was aware of the report but noted that it “remains to be verified”.

“We think any such sanction should be based on credible evidence and due process, and look forward to being treated fairly and unbiasedly,” Hikvision said.

The company added that it “has been and will continuously be strictly compliant with the applicable laws and regulations of the countries where we operate”, and that it was committed to “technology for good like all other leading technology companies”.

The Chinese government and its state media outlets have remained largely quiet on the issue.

Jon Bateman, a fellow in the Technology and International Affairs Program at the Carnegie Endowment for International Peace, said SDN sanctions on Hikvision could set a precedent for similar US action against facial recognition firms SenseTime and Megvii that were previously cited for alleged involvement in human rights abuses in Xinjiang.

“There will be immediate calls from … members of Congress for the Biden administration to take similar action against other Chinese tech companies,” Bateman said.

Police patrol the old city in Kashgar, Xinjiang Uyghur Autonomous Region, China, May 4, 2021. Photo: Reuters
Police patrol the old city in Kashgar, Xinjiang Uyghur Autonomous Region, China, May 4, 2021. Photo: Reuters

“At this point, Chinese tech companies should be on notice that any sales to Xinjiang security forces, or any sourcing and manufacture of products in Xinjiang, places them at high risk of US restrictive actions.”

Last June, US President Joe Biden signed an executive order banning US entities from investing in Hikvision and other Chinese companies involved in surveillance technology.

Experts, including Bateman, also say that even if the harsher sanctions are imposed, they will not be enough to change China’s policy on Xinjiang.

“These sanctions, if released, have a zero per cent chance of forcing a capitulation from Beijing on human rights,” said Kendra Schaefer, a partner and head of tech policy research at Beijing-based consultancy Trivium China.

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