WASHINGTON • The US government widened its trade blacklist to include some of China's top artificial intelligence (AI) start-ups, punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week.
The decision, which drew a sharp rebuke from Beijing, targets 20 Chinese public security bureaus and eight companies, including video surveillance firm Hikvision, as well as SenseTime Group and Megvii Technology, leaders in facial recognition technology.
The action bars the firms from buying components from American companies without US government approval - a potentially crippling move for some of them. It follows the same blueprint used by Washington in its attempt to limit the influence of Huawei Technologies for what it says are national security reasons.
US officials said the action was not tied to tomorrow's resumption of trade talks with China, but it signals no let-up in US President Donald Trump's hard-line stance as the world's two biggest economies seek to end their 15-month trade war.
The United States Commerce Department said in a filing that 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.
Beijing said Washington should stop interfering in its affairs. It will continue to take firm and resolute measures to protect its sovereign security, Chinese Foreign Ministry spokesman Geng Shuang told a regular media briefing without elaborating.
Hikvision, with a market value of about US$42 billion (S$58 billion), calls itself the world's largest maker of video surveillance gear.
SenseTime, which was valued at around US$4.5 billion in fund-raising in May last year, is one of the world's most valuable AI unicorns, while Megvii, backed by e-commerce giant Alibaba, is valued at around US$4 billion and is preparing an initial public offering to raise at least US$500 million in Hong Kong.
The other companies on the list are speech recognition firm iFlytek, surveillance equipment maker Zhejiang Dahua Technology, data recovery firm Xiamen Meiya Pico Information, facial recognition firm Yitu Technology and Yixin Science and Technology.
A US Hikvision spokesman said the company "strongly opposes" the decision and noted that, in January, it retained a human rights expert and former US ambassador to advise the company on human rights compliance.
"Punishing Hikvision, despite these engagements, will deter global companies from communicating with the US government, hurt Hikvision's US business partners and negatively impact the US economy," the company said.
Mr John Honovich, founder of surveillance video research company IPVM, said Hikvision and Zhejiang Dahua Technology both use Intel, Nvidia, Ambarella, Western Digital and Seagate Technology as suppliers and that the impact on the Chinese companies would be "devastating".
SenseTime said it abides by all relevant laws of the jurisdictions in which its operates. Megvii said it strongly objected to being placed on the blacklist.
iFlytek said the US move would not affect its daily operations, while Xiamen Meiya said its overseas revenue was less than 1 per cent of total revenue and that most of its suppliers were domestic companies.
REUTERS
