The Trump administration is considering blacklisting another major Chinese technology company in a move that would broaden a U.S. campaign to sever China’s access to American know-how and inflame a deepening trade conflict, according to an individual familiar with the debate.
Though no final decision has yet been reached, the administration is preparing to move against Hikvision, the world’s largest maker of video surveillance technology, the person said, speaking on the condition of anonymity. The deliberations were first reported by the New York Times.
The disclosure comes less than a week after the administration barred U.S. companies from supplying Huawei Technologies, perhaps China’s most prominent manufacturer, without first obtaining a U.S. government license. The administration earlier this week relaxed the ban, saying it would grant temporary 90-day waivers for U.S. companies to help Huawei maintain its existing networks.
U.S. officials are said to be eyeing the same penalty for Hikvision, using a Commerce Department mechanism known as the “entity list.”
Citing national security considerations, Congress last year banned federal agencies from purchasing equipment made by Hikvision and four other Chinese technology companies: Huawei, ZTE, Hytera and Dahua.
The measure was triggered by “classified information the committee reviewed in the course of our regular oversight activities,” according to Claude Chafin, a spokesman for the House Armed Services Committee.
Hikvision supplies surveillance cameras that the Chinese government has deployed throughout the Muslim-majority Xinjiang region to combat what it describes as separatist terrorism.
Randall Schriver, assistant secretary of defense for Asia, said earlier this month that the Chinese government is detaining 3 million Muslim Uighurs in reeducation camps. The authorities in Beijing describe the facilities as vocational training centers.
In an interview with Fox News on Tuesday, Cui Tiankai, China’s ambassador to the United States, denied reports of human rights abuses. “They are real training centers,” he said. “They are not camps. They have open gates. There’s no armed guards. People could go home over weekend.”
Hikvision last month reported earning about $1.65 billion on revenue of roughly $7.2 billion in 2018. In its annual shareholder letter, the company said it had faced numerous challenges last year but remained “upbeat about growth in the domestic and overseas markets in the years ahead.”
Hikvision said it had not received notice that the United States was preparing to take any actions from it, with a spokeswoman saying that the company has taken allegations about the use of its technology in Xinjiang very seriously.
The company had “engaged with the U.S. government” about these issues since October, said Vivian Zhou. Hikvision had hired American lawyer Pierre-Richard Prosper, who had served as ambassador at large for war crimes under President George W. Bush, to advise it on human rights compliance.
“Separately, Hikvision takes cybersecurity very seriously as a company and follows all applicable laws and regulations in the markets we operate,” the spokeswoman said in an emailed statement.
Last year, the company appointed a chief compliance officer to ensure human rights protection, data security and privacy protection, as well as social responsibility, she said.
Asked about the reports, a spokesman for Foreign Ministry did not address Hikvision directly but said the U.S. was “abusing its national power” by targeting individual Chinese companies. “We are against the U.S. trying to smear and oppress companies from other countries, including China,” Lu Kang told a regular press briefing.
The Trump administration’s intensifying campaign to limit China’s access to advanced U.S. technologies comes as a year-long trade conflict defies hopes of an early settlement.
Despite the president’s continued pursuit of a trade deal, the administration has been cracking down on China in other realms. The Justice Department in December indicted two hackers who allegedly worked with the Chinese Ministry of State Security, targeting companies holding advanced technologies with military applications.
The Commerce Department is drawing up new regulations to restrict U.S. exports of 14 advanced technologies, including robotics and quantum computing, in a move motivated by concern over China’s access to American innovations.
Some Trump administration officials want to disconnect American investors and companies from Chinese companies that help beef up the Chinese military, “Big Brother” surveillance networks or those that benefit from China’s alleged theft of U.S. trade secrets.
Last year, the Commerce Department banned state-backed ZTE from doing business with American suppliers after the company violated the terms of an earlier enforcement action.
But the president reversed the ban, which would have crippled ZTE, after a personal plea from Chinese President Xi Jinping.
The episode illustrates that any move to sever Chinese companies’ links to the United States might cause collateral damage to the U.S. economy. ZTE spends about $2.6 billion annually buying products from U.S. companies such as Qualcomm and Intel. Huawei also relies heavily on American suppliers.
Administration officials recognize that the greater the number and significance of Chinese companies affected by sanctions, the greater the pain for U.S. companies and their workers.
Ellen Nakashima in Washington and Anna Fifield in Beijing contributed to this report.
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