Defense Department names Hikvision on list of companies linked to Chinese military

In a move that could further impact video surveillance giant Hikvision’s ability to sell products in the United States, the U.S. Department of Defense (DoD) last week identified the company along with 19 other firms operating in the country as being businesses that are either owned or controlled by the Chinese military.

The list was published following a letter sent by lawmakers to Secretary of Defense Mark Esper last September requesting that a provision in the 1999 National Defense Authorization Act be used to officially name such companies in the U.S.

“The CCP has adopted a strategy of ‘Military-Civilian Fusion’ to achieve its national objectives, enlisting Chinese corporations and universities to harness emerging civilian technologies for military purposes,” the letter states, adding that “Military-Civilian Fusion is the CCP’s blueprint for China’s global ‘return’ to military preeminence.”

In a statement, Sens. Tom Cotton (R-Ark.) and Mike Gallagher (R-Wis.) called on the Trump administration to impose economic sanctions on the companies named. "We commend the Department of Defense for releasing this list of Chinese military companies operating in the United States and hope more will soon follow,” the statement reads. “This report is one piece of a broader campaign our nation must wage against the Chinese Communist Party and its parasitic technology transfer efforts. We urge the President to impose economic penalties against these Chinese military firms; meanwhile, Congress should update this 1999 law to better address the present-day challenges posed by China's Military-Civil Fusion strategy."

In a statement provided to SecurityInfoWatch, a spokesperson for Hikvision denied that the company had any links to the Chinese military and said that they would work with the U.S. government to resolve the matter.  “Hikvision strongly opposes the decision by the U.S. government to misapply a never-used provision of a 21-year-old law,” the statement reads. “This latest inclusion is baseless. As a publicly traded company and independently operated enterprise, details about our ownership have always been publicly available, while the company’s operation and business information is also publicly accessible. Not only is Hikvision not a ‘Chinese military company,’ Hikvision has never participated in any R&D work for military applications. Hikvision has always tried to fully and transparently cooperate with the U.S. government to answer questions and correct misunderstandings about the company. Hikvision will continue to try to work with the U.S. government to resolve all of these matters.”

Being named to the DoD list is just the latest in series of moves by the Trump administration that has sought to hamper the company’s ability to operate in the U.S. As a part of a provision in the 2018 National Defense Authorization Act (NDAA) that went into effect last August, federal agencies became prohibited from purchasing video surveillance products from Hikvision, Dahua and Hytera Technologies. In October, the administration went one step further as the Department of Commerce placed both Hikvision and Dahua on a blacklist that prohibits U.S.-based businesses from exporting their products to the companies over their alleged involvement in human rights violations carried out by the Chinese government.

According to Jim McHale, Director of Stockholm-based market research firm Memoori, while being named to the DoD list would be a blow to Hikvision’s international reputation and affect sales, it will likely have little impact on their position globally. “Given their dominance in the Chinese market, which is the largest single market, it will not reduce their dominance as the biggest global supplier too much,” he says.