Market shares of Hangzhou Hikvision Digital Technology Company collapsed by about 10% as the U.S. considered imposing potentially harsh new sanctions on the surveillance-technology giant. Hikvision, the Chinese surveillance camera maker, said it hopes to be “treated fairly” by the U.S. after the Financial Times reported that Washington imposed fresh sanctions on the conglomerate for its rumored involvement in human rights violations in China’s Muslim-majority Xinjiang region.
In accordance with individuals in the proverbial room, the Biden administration is waiting on whether to add Tech Hikvision to its Specially Designated Nationals and Blocked Persons List. The sanctions would be related to alleged human rights violations by China against Muslim minorities in its far-western region of Xinjiang. A final decision is unlikely this month, said one of the people who declined to be identified, as a determination was not conclusive. Hikvision’s stock fell by ¥38.24 (Yuan) in Shenzhen after the holiday break, dropping by its daily limit.
Hikvision digital technology company was already sanctioned by the U.S. in 2019, along with seven other Chinese technology giants, making it more challenging for them to do business with American companies. However, the more severe sanctions under consideration barred Americans from doing business with the company and made its global customers potential targets of U.S. action.
“This seems to be limited to Hikvision for now, but it creates uncertainty that successful Chinese companies could be the target in the future,” said Wai Ho Leong, a strategist at Modular Asset Management S.P. Pte.
He further added, “The potential action by the U.S. government, as reported, remains to be verified.” “We think any such sanction should be based on credible evidence and due process, and look forward to being treated fairly and unbiasedly.” “At this point, Chinese tech companies should be on notice that any sales to Xinjiang security forces, or any sourcing and manufacture of products in Xinjiang, places them at high risk of U.S. restrictive actions.”
Last June, US President Joe Biden signed an executive order banning U.S. entities from investing in Hikvision and other Chinese companies involved in surveillance technology. “These sanctions, if released, have a 0% chance of forcing a capitulation from Beijing on human rights,” said Kendra Schaefer, a partner and head of tech policy research at Beijing-based consultancy Trivium China.
A U.S. National Security Council representative said it does not foresee future sanctions. Hikvision found itself in the crosshairs of the Trump administration in 2019 after joining other Chinese companies – including Huawei Technologies Company Ltd. on an entity list that prevents American firms from supplying it with components and software. These fresh, tougher sanctions would take the Biden administration’s economic war against China in a new direction. It deals with a heavy long-term blow against Hikvision, as companies and governments worldwide might be forced to reconsider their relationship with Hikvision.
Agencies and corporations across Europe and Asia use Hikvision’s cameras, which is among some of the companies Beijing is counting on to spearhead advances in artificial intelligence. The company doesn’t play a significant role in those ambitions, but it’s a pivotal partner to Beijing’s government.
These cameras have been used in cities from Paris to Bangkok and are considered pivotal in facilitating crime prevention and in helping build “smart cities” or networked urban environments. Thanks to cheaper yet capable cameras, the Chinese company has index rapid growth over a short period of time. Demand for its surveillance cameras, video storage, and data analysis services has subsequently boomed, particularly on its home turf. Overseas, the company competes against Canon, Hanwha Techwin, and Bosch.
China’s Foreign Ministry spokesman Zhao Lijian said, “China firmly opposes the U.S’ moves to using human rights as an excuse and abuse state power and its domestic law to hobble Chinese companies,” on Thursday at a regular press briefing in Beijing.