Hikvision is a Chinese surveillance technology giant that most people in the US have never heard of. But the Trump administration seems to have set its eyes on the video surveillance firm. Just days after the US government blacklisted Huawei, the New York Times has learned from reliable sources that Washington could blacklist Hikvision in the “coming weeks.”
Why would the US want to blacklist Hikvision?
The trade war between the US and China continues to escalate, and the blacklisting of Huawei and Hikvision could make things worse. Following the report, shares of Hangzhou Hikvision Digital Technology Co plunged as much as 10% in Shenzhen. If the White House blacklists the video surveillance gear maker, the US companies will no longer be able to supply it hardware, software, or services without the government’s approval.
A Hikvision executive told Reuters that the company hadn’t been informed on the potential US blacklisting. Even if the US ban it, it is likely to have limited impact on the Chinese company. Most of Hikvision’s suppliers are in China. It sources a small number of components from the US. The company could easily source those components from Chinese suppliers if necessary. However, the blacklisting could severely hit its ambitions to boost sales in North America.
Hikvision is the world’s largest maker of surveillance equipment with no major rival. Its products use artificial intelligence and facial recognition to allow its clients to monitor people and their activities. The Chinese government is one of its biggest clients, using Hikvision’s traffic cameras, drones, and thermal cameras to monitor roads, railway stations, and other sites.
The US lawmakers fear that Beijing is using Hikvision’s equipment to monitor the Turkic-speaking Uighur Muslims in the Xinjiang province. China has set up facilities in Xinjiang that the United Nations experts have described as “mass detention centers” to curtail the cultural and religious freedom of Uighurs. The facilities could hold as many as three million people. Western nations have condemned China’s actions, but Beijing claims the measures are aimed at preventing Islamist militancy.
Hikvision and its smaller rival Dahua Technology were cited in a letter signed by more than 40 US lawmakers to President Trump’s top advisers. The letter described China’s actions in Xinjiang as “crimes against humanity.” The lawmakers urged White House to ensure that the American companies are not helping Beijing in this regard in any way.
The US-China trade talks have failed to deliver desired results. So, President Trump has raised taxes on $200 billion worth of Chinese imports and blacklisted Huawei, which allegedly has deep ties with the Chinese government. China poses a serious threat to the US dominance as a global power. The Trump administration is planning to tax another $300 billion worth of Chinese imports.
Huawei might be down, but not out
Just a few days ago, Google terminated Huawei’s Android license after the US government added it to a trade blacklist. Other US technology companies have also stopped doing business with Huawei. The termination of the Android license could be a big blow to the Chinese company, which aimed to become the world’s largest smartphone vendor by 2020.
Huawei could still use the open source version of Android. The US government has also given it a 90-day reprieve, allowing it to provide software updates, security patches, and other services to existing Huawei phone users. Huawei has been preparing for such an eventuality for at least seven years. It has been developing Hongmeng OS since at least 2012 to ditch Android.
Huawei has also been trying to lure app developers to build apps for its App Gallery, which could be its answer to the Google Play Store. Huawei founder Ren Zhengfei recently said that the US “underestimates our strength.” The company could build an alternative to Android and Play Store and sell its phones in China, where Google services are already banned. But the lack of Google services such as Gmail, Google Maps, YouTube, and Chrome on its handsets could hurt its sales outside China.