More Hikvision Sanctions Could Dangerously Inflame US-China Relations, Think Tank Says
Adding sanctions on Chinese surveillance company Hikvision would represent a “profound escalation” of U.S.-China technology tensions, prompt retaliation from China and further accelerate economic decoupling, the Carnegie Endowment for International Peace said May 6. The sanctions, reportedly under consideration by the Biden administration (see 2205040009), could “vault Hikvision past Huawei to become the most-sanctioned Chinese tech company,” the think tank said.
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Although Hikvision is already on the Entity List, those current restrictions “pale in comparison to what Washington is now considering,” Carnegie said, which includes adding the company to the Treasury Department’s Specially Designated Nationals List. While much will depend on how and if the sanctions are implemented, severe restrictions could freeze all of Hikvision’s assets, create civil and criminal penalties for its business partners and employees, and block it from using many banks, the think tank said.
The post, written by cyber policy fellow Jon Bateman, urges the administration not to impose the sanctions, adding that they would likely lead to strong countermeasures from Beijing. “It’s impossible to imagine that the Chinese government would comply with these sanctions, facilitating the humiliation and potential destruction of one of its own national champions,” Bateman wrote. Placing Hikvision on the SDN List would “likely force Chinese leaders to show strength,” perhaps by freezing the Chinese assets of a large U.S. company, suspending talks with the U.S. on a range of issues or “further closing ranks with Russia as the war in Ukraine rages.”
An SDN designation for Hikvision could also “create domestic political pressure” for similar designations of other Chinese companies, Carnegie said, including drone-maker DJI, surveillance technology company Dahua and artificial intelligence company SenseTime -- all of which are on the Entity List.
“Any further SDN listings would effectively declare economic war on growing portions of the Chinese tech sector -- with serious and unpredictable consequences for bilateral relations, global stability, and the U.S. economy,” the post said. “If U.S. leaders can’t convincingly justify whatever line they may wish to draw around Hikvision, then Beijing, other governments, and the global private sector could come to expect a much more serious and abrupt technological decoupling than U.S. leaders really intend.” The White House didn’t comment.