Pentagon names Huawei and Hikvision among 20 Chinese military-backed firms

The Pentagon put Huawei Technologies and Hangzhou Hikvision Digital Technology on a list of 20 companies it says are owned or controlled by China’s military, opening them up to potential additional US sanctions.

This list includes “entities owned by, controlled by, or affiliated with China’s government, military, or defense industry,” Pentagon spokesman Jonathan Hoffman said in a statement.

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“As the People’s Republic of China attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical,” Hoffman said. “We envision this list will be a useful tool for the US government, companies, investors, academic institutions, and like-minded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”

In letters to lawmakers dated June 24, the Pentagon said it was providing a list of ''Communist Chinese military companies operating in the United States.'' The list was first requested in the fiscal 1999 defense policy law.

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The DOD document also includes China Mobile Communications Group and China Telecommunications Corp as well as aircraft manufacturer Aviation Industry Corp of China. 

The designations were drawn up by the Defense Department, which was mandated by a 1999 law to compile a list of Chinese military companies operating in the United States, including those ''owned or controlled'' by the People’s Liberation Army that provide commercial services, manufacture, produce or export.

The Pentagon’s designations do not trigger penalties, but the law says the president may impose sanctions that could include blocking all property of the listed parties. 

The move’s implications were not immediately clear. But it came as relations between the two superpowers continue to deteriorate, and as China has become an issue in the US election campaign. China has for the past year threatened to produce its own “unreliable entities” list, but has so far not done so.

The list of companies said to be affiliated with the Peoples Liberation Army was mandated under the Defense Authorization Act of 1999, but no administration ever put out the required report. Trump has the authority under the International Emergency Economics Powers Act of 1977 to level financial sanctions against those companies.

China’s foreign and defense ministries, as well as the State-owned Assets Supervision and Administration Commission, which oversees China’s government-run companies, didn’t immediately reply to a fax during a public holiday in the country. Huawei also didn’t immediately reply to a request for comment.

Hikvision called the U.S. move “baseless,” saying its ownership details have always been publicly available as a listed company and “independently operated enterprise.” It said it would continue to work with the U.S. government “to answer questions and correct misunderstandings about the company.”

“Hikvision strongly opposes the decision by the US government to misapply a never-used provision of a 21-year-old law,” a company spokesperson said. “Not only is Hikvision not a ‘Chinese military company,’ Hikvision has never participated in any R&D work for military applications.”

“The list put out today by the Pentagon is a start but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party’s activities threatening U.S. economic and national security,” Republican Senator Marco Rubio said in a statement.

Washington had placed Huawei and Hikvision on a trade blacklist last year over national security concerns and has led an international campaign to convince allies to exclude Huawei from their 5G networks.