Credit: IDG
The United States government has expanded its trade blacklist to include some of China's top artificial intelligence startups and surveillance technology vendors.
The move is aimed at punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week.
The decision, almost certain to draw a sharp response from Beijing, targets 20 Chinese public security bureaus and eight companies including video surveillance firm Hikvision, as well as leaders in facial recognition technology SenseTime Group and Megvii Technology.
The action bars the firms from buying components from US companies without US government approval - a potentially crippling move. It follows the same blueprint used by Washington in its attempt to limit the influence of Huawei Technologies for what it says are national security reasons.
US officials said the action was not tied to this week's resumption of trade talks with China, but it signals no let-up in US President Donald Trump's hard-line stance as the world's two biggest economies seek to end their 15-month trade war.
The Commerce Department said in a filing the "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."
"The US Government and Department of Commerce cannot and will not tolerate the brutal suppression of ethnic minorities within China," said Secretary of Commerce Wilbur Ross.
China's commerce ministry did not immediately respond to a Reuters request for comment.
Hikvision, with a market value of about US$42 billion, calls itself the world's largest maker of video surveillance gear.
SenseTime, valued at around US$4.5 billion in a May 2018 fundraising, is one of the world's most valuable AI unicorns while Megvii, backed by e-commerce giant Alibaba, is valued at around US$4 billion and is preparing an IPO to raise at least US$500 million in Hong Kong.
The other companies on the list are speech recognition firm iFlytek Co, surveillance equipment maker Zhejiang Dahua Technology, digital data forensics products maker Xiamen Meiya Pico Information and Yixin Science and Technology Co.
A US Hikvision spokesman said the company "strongly opposes" the decision and noted that in January it retained a human rights expert and former US ambassador to advise the company on human rights compliance.
"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," the company added.
John Honovich, founder of surveillance video research company IPVM, said Hikvision and Dahua both use Intel Corp, Nvidia Corp, Ambarella Inc, Western Digital and Seagate Technology as suppliers and that the impact on the Chinese companies would be "devastating".
In August, the Trump administration released an interim rule banning federal purchases of telecommunications equipment from five Chinese companies, including Huawei and Hikvision.
The ban was included in the National Defense Authorization Act passed last year, and restricted the use of federal money to purchase telecommunications equipment and services and video surveillance equipment from "covered" telecommunications companies, citing national security concerns.
Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services and has filed a lawsuit against the US government's restrictions.
The blacklisting of Huawei has hurt many of its US suppliers that depended on the world's largest telecommunications company for revenue and made it difficult for Huawei to sell new products.
(Reporting by David Shepardson in Washington and Josh Horwitz in Shanghai; Additional reporting by Jane Lee in San Francisco, Miyoung Kim in Singapore, Brenda Goh in Shanghai; Editing by Tom Brown and Edwina Gibbs)
