US puts 28 Chinese security bureaus, companies on blacklist over Uighur treatment

Discussion in 'Economics' started by themickey, Oct 8, 2019.

  1. themickey

    themickey

    Washington: The US Commerce Department on Monday placed 28 Chinese public security bureaus and companies - including video surveillance company Hikvision - on a US trade blacklist over Beijing's treatment of Uighur Muslims and other predominantly Muslim ethnic minorities.

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    Hikvision surveillance cameras.Credit:AP

    Those added to the so-called "Entity List" include the Xinjiang Uighur Autonomous Region People's Government Public Security Bureau, 19 subordinate government agencies and eight commercial firms, according to a Commerce Department filing.

    The companies include some of China's leading artificial intelligence firms such as SenseTime Group, and Megvii Technology, which is backed by Alibaba, as well as Hikvision, formally known as Hangzhou Hikvision Digital Technology, Zhejiang Dahua Technology, IFLYTEK, Xiamen Meiya Pico Information, and Yixin Science and Technology.

    Megvii filed for an IPO this summer of at least $US500 million ($741 million) in Hong Kong, while SenseTime raised $US620 million in a second round of funding in just two months last year and is one of the world's most valuable unicorns in artificial intelligence.

    While US officials said the announcement was not tied to this week's resumption of trade talks with China, the announcement sets the tone for a potentially more aggressive positioning by Washington in negotiations with Beijing to end an 15 month trade war between the world's biggest economies.

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    Visitors pass by a booth for state-owned surveillance equipment manufacturer Hikvision at the Security China 2018 expo in Beijing. Credit:AP

    Reuters reported on the planned additions earlier on Monday, before the Commerce Department made it official.

    The department filing said 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.

    The list includes municipal and county public security bureaus and the Xinjiang Police College. In China a public security bureau is a municipal office responsible for law enforcement, fire prevention, traffic control, immigration control and other matters affecting public security.

    Being added to the "Entity List" bars companies or other entities from buying parts and components from US companies without US government approval.

    The Commerce Department previously added Huawei Technologies and more than 100 affiliates to the Entity List. The Huawei listing 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.

    Hikvision, with a market value of about $US42 billion, calls itself the world's largest video surveillance gear maker. Reuters reported in August Hikvision receives nearly 30 per cent of its 50 billion yuan ($US7 billion) in revenue from overseas.

    A US Hikvision spokesman said late on Monday the company "strongly opposes today's decision by the US government" and noted in January it retained a human rights expert and former US ambassador to advise the company on human rights compliance.

    Uighur Australians speak out against China's camps
    [​IMG]


    They've built a life here, but for many in Australia's Uighur community, it's what they've left behind that haunts them.
    "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.

    Senator Marco Rubio, a Republican, praised the Commerce announcement.

    "The Trump administration is sending a strong, clear message that the United States will hold the Chinese government and Communist Party and their enablers accountable for Beijing's large-scale, systematic and egregious human rights abuses against Uighurs and other religious ethnic minorities in Xinjiang," Rubio said.

    The Chinese embassy in Washington also did not immediately comment.

    China faces growing condemnation from Western capitals and rights groups for setting up facilities that UN experts describe as mass detention centres holding more than 1 million ethnic Uighurs and other Muslims.

    In April, a bipartisan group of US lawmakers urged the move against Chinese companies it called "complicit in human rights abuses" and specifically cited Hikvision and Dahua.

    US Secretary of State Mike Pompeo said last week at the Vatican that "when the state rules absolutely, it demands its citizens worship government, not God. That's why China has put more than one million Uighur Muslims ... in internment camps and is why it throws Christian pastors in jail."

    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."

    Shares in Ambarella fell 12 per cent in after hours trading on the news.

    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 (NDAA) 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.
    Reuters
    https://www.smh.com.au/world/north-...st-over-uighur-treatment-20191008-p52yo1.html
     
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  2. themickey

    themickey


    [​IMG] Bloomberg ›


    China Signals It Will Hit Back Over U.S. Tech Blacklist
    Jenny Leonard October 08, 2019
    China signaled it would hit back after the Trump administration placed eight of the country’s technology giants on a blacklist over alleged human rights violations against Muslim minorities.

    Asked on Tuesday if China would retaliate over the blacklist, foreign ministry spokesman Geng Shuang told reporters “stay tuned.” He also denied that the government abused human rights in the far west region of Xinjiang.

    “We urge the U.S. side to immediately correct its mistake, withdraw the relevant decision and stop interfering in China’s internal affairs,” Geng said. “China will continue to take firm and forceful measures to resolutely safeguard national sovereignty, security and development interests.”

    The move, which was announced after U.S. markets closed, came on the same day negotiators from the U.S. and China began working-level preparations for high-level talks due to begin Thursday in Washington. A Commerce Department spokesman said the “action is unrelated to the trade negotiations,” and China confirmed Liu He would lead the delegation as planned. Markets focused on the resumption of discussions as a reason to buy stocks.
    The blacklist, first reported by Reuters, still takes President Donald Trump’s economic war against China in a new direction, marking the first time his administration has cited human rights as a reason for action. Past moves to blacklist companies such as Huawei Technologies Co. have been taken on national security grounds.

    The companies on the blacklist include two video surveillance companies -- Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. -- that by some accounts control as much as a third of the global market for video surveillance and have cameras all over the world.

    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. Backed by Chinese e-commerce giant Alibaba Group Holding Ltd., the pair are at the forefront of China’s ambition to dominate AI in coming years.

    Entities on the list are prohibited from doing business with American companies without being granted a U.S. government license, though some have maintained relationships with banned companies through international subsidiaries. Hikvision and Dahua were suspended from trading Tuesday but iFlytek Co., one of the eight singled out, slid as much as 3.1% in Shenzhen.

    Also included are Xiamen Meiya Pico Information Co. Ltd, which bills itself as an “expert in digital forensics and cybersecurity in China,” according to its website, and Shanghai-based Yixin Science and Technology, a supplier of micro and nano fabrication equipment.

    “Specifically, these 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” in Xinjiang, the U.S. Commerce Department said in a federal register notice published Monday.

    The foreign ministry’s Geng accused the U.S. having “sinister intentions.”

    “The so-called human rights issue of the U.S. does not exist in Xinjiang,” he said. “The measures taken by China to eliminate extremism from the roots are fully in line with Chinese law and international practice.”

    SenseTime and Dahua weren’t immediately available for comment outside of normal business hours.

    “Hikvision strongly opposes today’s decision by the U.S. government and it will hamper efforts by global companies to improve human rights around the world,” the company said in a statement. “Punishing Hikvision, despite these engagements, will deter global companies from communicating with the U.S. government, hurt Hikvision’s U.S. businesses partners and negatively impact the U.S. economy.”

    Megvii said the U.S. had “no grounds” to put it on the list, and noted that Human Rights Watch had corrected a report that implicated the company. It added that it hadn’t earned revenue from Xinjiang in the first part of the year, and the impact on its business from the designation was minimal.

    “We believe our inclusion on the list reflects a misunderstanding of our company and our technology, and we will be engaging with the U.S. government on this basis,” Megvii said.

    The blacklist comes as Trump faces growing pressure at home to support pro-democracy protests in the Chinese-controlled territory of Hong Kong. On Monday, Trump said he was hoping for a “humane solution” in a city where protests have grown increasingly violent.

    “They even have signs, ‘Make China Great Again,’ ‘Make Hong Kong Great Again,’” he told reporters. “They have tremendous signage.”

    None of the other companies had immediate comment.

    What Our Economists Say:
    “With growth fading, the U.S. and China could both use at least a reprieve from trade tensions. A mini-deal was mooted. It now looks less likely.”

    The ban complicates a planned initial public offering for Megvii. The company filed in August to go public in Hong Kong. The terms and timing of a listing weren’t disclosed, but people familiar with the company’s plans have said it’s seeking to raise as much as $1 billion. SenseTime lists Nvidia Corp. and Qualcomm Inc. among more than 700 global partners. Nvidia declined to comment, and Qualcomm didn’t immediately have a comment.

    Four of the eight companies put on the blacklist are already publicly traded in China. Dahua’s shares have risen 17% in the past year, while Hikvision is up 12.4%. iFlytek has gained 11.5% and Xiamen Meiya Pico Information has climbed 7.9%.

    The move targets Chinese surveillance companies involved in the crackdown in Xinjiang, where as many as a million Uighur Muslims have been placed in mass detention camps, prompting criticism from around the world.

    Read more: Inside the Vast Police State Taking Over China’s Belt and Road

    “The U.S. government and Department of Commerce cannot and will not tolerate the brutal suppression of ethnic minorities within China,” Secretary of Commerce Wilbur Ross said in a statement on Monday. “This action will ensure that our technologies, fostered in an environment of individual liberty and free enterprise, are not used to repress defenseless minority populations.”

    The White House in May had readied the sanctions package for surveillance technology companies accused of human rights violations but decided to hold back because of the ongoing trade negotiations.

    The Trump administration in June again considered the sanctions and had planned to roll them out with a human rights speech by Vice President Mike Pence on the anniversary of the Tiananmen Square massacre, Bloomberg has reported. The speech was postponed indefinitely -- at the request of Chinese officials -- so that Trump could secure a meeting with Chinese leader Xi Jinping at the Group of 20 summit in Osaka.

    Also to be placed on the Commerce Department’s “entity list” are the Xinjiang region’s public security bureau and 18 other municipal and county public security bureaus as well as the province’s police college.

    — With assistance by Jennifer A Dlouhy, Justin Sink, Ian King, Candy Cheng, Michael Hytha, Mark Milian, Edwin Chan, and James Mayger
    https://www.bloomberg.com/news/arti...ion-over-u-s-tech-blacklist?srnd=premium-asia
     
  3. Here4money

    Here4money

  4. piezoe

    piezoe

    Human rights abuses anywhere are deplorable. However the U.S. administration has its priorities in the wrong order. They should reunite the parents with the kids they caged and denied basic necessities of life to before they start lecturing the Chinese Government.
     
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