The US administration is ratcheting up pressure on China’s technology champions amid reports that it is also considering restrictions on the ability of video surveillance group Hikvision to buy American products, a move which would likely inflame tensions between the world’s two-biggest economies.
Coming hot on the heels of US President Donald Trump’s decision to add Huawei to a US trade blacklist, which is threatening to put the Chinese telecoms giant out of business outside of China, it is now looking at similar limits on Hikvision, The New York Times reported on Tuesday, citing people familiar with the matter.
In response to a request for comment, a spokeswoman for Hikvision said on Wednesday the company had been “engaged with the US government” on human rights concerns related to surveillance since October last year. “Separately, Hikvision takes cybersecurity very seriously and we follow all laws and regulations in the markets we operate.”
There was no comment on reports of the impending US restrictions.
Hikvision is one of the world’s largest manufacturers of video surveillance products and is central to China’s ambitions to be the top global exporter of surveillance systems. The US Commerce Department may require that American companies obtain government approval to supply components to Hikvision, limiting the company’s access to technology that helps power its equipment, according to The New York Times.
Meanwhile, a separate report by Bloomberg said on Wednesday that the US administration is considering cutting off the flow of vital American technology to as many as five Chinese video surveillance companies, including Hikvision and Zhejiang Dahua Technology, citing people familiar with the situation.
A Dahua spokeswoman did not immediately respond to a request for comment.
In the span of two weeks, Trump has raised tariffs on US$200 billion worth of Chinese goods, threatened to tax all imports and taken steps to cripple Huawei by adding it to an “Entity List”, which effectively bans them from buying US technology. China has promised to retaliate against American industries.
If the US takes measures against Hikvision, one of China’s up-and-coming tech champions, it would also mark the first time the Trump administration has punished a Chinese company for its role in the surveillance and mass detention of Uygurs, a mostly Muslim ethnic minority, by China’s authorities.
US Administration officials could make a final decision in the coming weeks, the New York Times reported.
The combination of more traditional surveillance equipment with new technologies, like artificial intelligence, speech monitoring and genetic testing, is helping make monitoring networks increasingly effective – and intrusive. Hikvision says its products enable their clients to track people around the country by their facial features, body characteristics or gait, or to monitor activity considered unusual by officials, such as people suddenly running or crowds gathering.
If US restrictions were put on Hikvision, one of the key concerns would be around graphics processing chips supplied by US firm Nvidia for use in the Chinese company’s computer vision-related products, but the impact would likely be “less disruptive” than the market currently expects, according to a Jefferies research note on Wednesday.
Last year’s US trade blockade of ZTE, which brought the Chinese telecom gear maker to its knees, and the current attacks on larger rival Huawei are the opening salvoes in a tech war that the current administration is determined to pursue even if the two countries come to a truce on the trade dispute, according to sources familiar with US policy thinking.
Attitudes toward China have hardened and the emerging consensus in the US is that China should be treated as a strategic competitor as its technological ambitions pose a direct threat. The US has also said Huawei poses a national security risk given deep ties between the Chinese government and industry and laws that could require Chinese firms to hand over information if asked.
China has begun exporting surveillance technology to nations that seek closer tabs on their citizens, including Ecuador, Zimbabwe, Uzbekistan, Pakistan and the United Arab Emirates.
The surge in China’s surveillance industry comes after 2015 guidelines from the National Development and Reform Commission, China’s top economic planner, for the country to set up an “omnipresent, fully networked, always working and fully controllable” video surveillance system nationwide at “all levels” by 2020.
Hikvision, which is listed in Shenzhen, traces its beginnings to a Chinese government research institute. State-owned CETHIK Group is Hikvision’s biggest shareholder with a 39 per cent stake. Net income rose 21 per cent to 11.4 billion yuan (US$1.7 billion) last year.
Sales to government and public agencies accounted for about 30 per cent of Hikvision’s domestic sales, with the rest made up of private enterprises, according to a previous statement from Hikvision.
More from South China Morning Post:
- Chinese surveillance camera supplier Hikvision posts slowest profit growth in a decade
- US-led backlash against China’s Huawei, Hikvision seen giving higher-cost rivals an opening to win contracts
- Here’s what you need to know about Hikvision, the camera maker behind China’s mass surveillance system
This article US said to be mulling restrictions on China surveillance group Hikvision’s ability to buy US technology first appeared on South China Morning Post