Why US blacklisting of 28 China tech companies is unlikely to work
Oct 09 2019
Other notable mentions include Xinjiang province's Public Security Bureau, as well as 19 other smaller government agencies.
Eight commercial Chinese companies have also been blacklisted, including video surveillance company Hikvision as well as leading Chinese artificial intelligence firms SenseTime Group Ltd, and Megvii Technology Ltd.
Commerce Secretary Wilbur Ross walks into the East Room of the White House before a news conference with President Trump and Australian Prime Minister Scott Morrison, Friday, September 20, 2019, in Washington.
Commerce Secretary Wilbur Ross said that adding the entities to the blacklist will prevent US companies from contributing to China's repression efforts of its "defenseless minority populations".
China has faced growing condemnation from human rights groups in recent months for its detention of up to one million ethnic Uighurs and other minority Muslims in large internment camps in Xinjiang. Entities on the list are prohibited from doing business with American companies without being granted a USA government license, though some have maintained relationships with banned companies through worldwide subsidiaries. He also denied that the government abused human rights in the far west region of Xinjiang.
IFlytek said in a statement Tuesday that being barred from doing business with USA firms won't have a serious impact on its "daily operations". Also targeted were SenseTime Group Ltd. - the world's most valuable artificial intelligence startup - and fellow AI giant Megvii Technology Ltd., which is said to be aiming to raise up to $1 billion in a Hong Kong initial public offering.
"Hikvision strongly opposes today's decision by the USA government and it will hamper efforts by global companies to improve human rights around the world", the company said in a statement.
But The Wall Street Journal said the action was "nonetheless likely to disturb Chinese officials already incensed over what Beijing sees as US support for an increasingly disruptive pro-democracy movement in Hong Kong".
On Tuesday, Chinese Foreign Ministry spokesman Geng Shuang gave a forceful response to the US measure.
Chinese video surveillance giant Hikvision has opposed the U.S. move, stressing that the decision has no basis in fact, according to Chinese-based media reports.
The US government has added eight firms specialising in facial recognition to the so-called "entity list" of foreign firms which are banned from trading with US companies. But the decision is likely to rankle the Chinese government, which has helped support some of these companies as they have developed into cutting-edge technology firms.
In 2017 alone, more than 530 patents related to surveillance cameras and video surveillance were published in China, compared with just 96 in the US the same year, according to New York-based market consultancy, CB Insights. The measure announced Monday targets providers of technology Washington says is being used to repress Muslim ethnic minorities.
"I think the Chinese are probably going to see a connection, even if the administration says there isn't one", said Matthew Goodman, senior adviser for Asian economics at the Center for Strategic and International Studies.