The Chinese watch giants, involved in the suppression of the Uyghur and Kazakh minority in Xinjiang, have been blacklisted, banning US companies from selling their components.
After telecom giants Huawei and ZTE, US attacks Chinese surveillance leaders: Monday, October 7, the US Commerce Department added 28 names to its "list of entities," a blacklist of companies with which Americans do not have the right to do business. In addition to about twenty institutions, such as the Xinjiang Public Security Bureau, China's surveillance leaders like Hikvision, world leader in surveillance cameras, valued at 38 billion euros, or Sensetime, a specialized start-up in facial recognition, valued at 6.8 billion euros, are all on the list.
The US Department accuses these companies of participating in the repression of members of the Uyghur and Kazakh Muslim minorities in Xinjiang, the autonomous region of western China transformed into a police state, with omnipresent cameras and checkpoints at the entrance of cities, and Rehabilitation camps "where more than one million people are interned. But the American blacklist is also one more weapon in the trade war with China.
Hikvision lost 2.68% Tuesday morning
The new entities « were involved in human rights abuses and violations as part of the campaign of repression, mass arbitrary detention and high-tech surveillance against Uighurs, Kazakhs, and other members of Muslim minorities In Xinjiang, justifies the release of the US Department of Commerce. On the Shenzhen Stock Exchange, Hikvision lost 2.68% Tuesday morning, its competitor Dahua, number 2 worldwide surveillance cameras, shrank by 3.25% and iFlytek, voice recognition specialist, 1.91%. Even lower for Xiamen Meiya Pico Information, which manufactures, in particular, tools used by the police to intercept wireless communications and suck information from a smartphone during checks. Modest declines because the US decision was anticipated: in May, when the New York Times had revealed the plan to place Hikvision on blacklist, the company had lost 10% in Shenzhen.
The blow should be less severe for these companies than for ZTE early 2018, and Huawei this year, because the companies have had the time to prepare. According to specialists, they should replace American components more easily with Chinese or international products. In addition, the case of Huawei, blacklisted since May, but which has benefited from two delays of 90 days for now, has allowed US companies to adapt: only the components manufactured in the United States are concerned by the ban. For example, US chip manufacturers Qualcomm and Micron have been able to continue exporting certain products to China, provided they do not contain more than 25% of "made in America" components.
Negotiations on a trade agreement resumed
In a note last May, Rex Wu, a consultant for the Jefferies research firm, estimated that Hikvision had the means to replace these components with Chinese suppliers, and that the company's revenue should continue to grow thanks to to the " supply platforms of the Chinese central government , Noting that " the budget for public security in Xinjiang in 2019 continues to increase ".
Faced with the possibility of a black listing of these companies in May, a spokesman for the Chinese Ministry of Foreign Affairs had accused the United States " to use their national power to tarnish the reputation and oppress some Chinese companies ". Negotiations on a trade agreement between the world's two largest economic powers resumed on Monday [October 7th] in Washington between advisers, in preparation for a new meeting on Thursday [October 10th] between the Chinese envoy, Deputy Prime Minister Liu He, Trade Representative Robert Lighthizer, and Secretary of the Treasury, Steven Mnuchin.