U.S. Adds Chinese Startups to Trade Blacklist

Ahead of this week's trade talks between the two countries, the timing of the U.S. action "is going to be awkward for the Chinese."
Matthew HellerOctober 8, 2019

The U.S. has added 28 Chinese organizations including video surveillance giant Hikvision to a trade blacklist in a move that may further escalate trade tensions between the two countries.

Under the action announced Monday by the Commerce Department, 20 Chinese public security bureaus and eight companies will be barred from buying components from U.S. companies without U.S. government approval.

The department denied the move was related to trade negotiations, saying the organizations “have been implicated in human rights violations and abuses in China’s campaign targeting Uighurs and other predominantly Muslim ethnic minorities” in Xinijiang province.

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“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.

But The Wall Street Journal said the action was “nonetheless likely to disturb Chinese officials already incensed over what Beijing sees as U.S. support for an increasingly disruptive pro-democracy movement in Hong Kong.”

“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. “It’s going to complicate the [trade] discussions this week …the timing is going to be awkward for the Chinese.”

In addition to Hikvision, those added to the blacklist include Megvii Technology, SenseTime Group, Dahua Technology, and the Xinjiang Public Security Bureau and 19 subordinate entities. Telecommunications giant Huawei Technologies has been on the list since May.

“While highly symbolic, the Commerce Department’s action is unlikely to have a major practical impact on the Chinese firms, which rely on plenty of non-U.S. suppliers and have had months of advance warning to diversify their supply chains away from U.S. companies,” the WSJ said.

“The export controls also won’t prevent American companies from selling certain goods made outside the U.S. to these firms, as they have been doing with Huawei,” it added.

A Hikvision spokesman said the company “strongly opposes” the decision and that it “respects human rights and takes our responsibility to protect people in the U.S. and the world seriously.”