The Wall Street Journal reported on Wednesday that many of the blacklisted Chinese companies are masquerading as American businesses to operate in the United States and avoid fines.
The US government has taken several steps. crack under The sanctions are aimed at Chinese companies that have ties to the Chinese Communist Party and have been identified as potential threats to national security. However, the companies of concern, including Hexi Group, SZ DJI Technologies, BGI Group, Huawei, and ByteDance, have not been penalized because they partner with US-based companies to sell products and services in the US. according to To the WSJ. (Related article: China pumps tens of billions of dollars into key industries amid tech war with US)
“Chinese companies will take a hit, but then they can adjust their business strategies and move in a different direction,” Derek Scissors, a former member of the U.S.-China Economic and Security Review Commission, told the Journal.
According to The Wall Street Journal, automotive technology company American Lidar was registered in Michigan in December 2023 without disclosing that its parent company is China-based Hesai Group, which has raised concerns from intelligence agencies that its lidar technology, a laser sensor that creates three-dimensional maps of the surrounding environment, could be used to collect U.S. data for Beijing.
(Photo by JADE GAO/AFP via Getty Images)
According to The Wall Street Journal, one month after American Rider registered to build a manufacturing plant in Michigan, the Department of Defense (DOD) blacklisted the joint venture as a Chinese military entity operating in the U.S., causing the company’s stock price to immediately plummet. The joint venture blames the DOD’s blacklisting decision for the drop in its stock price, which has never fully recovered.
According to the WSJ, Hesai claims that its lidar technology cannot be used for surveillance purposes because it does not store or transmit data. Plans to build a factory in Michigan have been scrapped. A Hesai spokesman told the WSJ that “American Lidar” is a proxy name to ensure consumers know that the company’s products are made only in the United States.
Hesai Sued In May, the department issued a warning to the Department of Defense, saying there was no basis to classify the group as a Chinese military organization or an organization affiliated with the Chinese Communist Party.
(Photo: STR/AFP via Getty Images)
The Pentagon also added BGI Genomics, a healthcare subsidiary of China-based BGI Group, to the Chinese military’s blacklist in 2022. Like Hesai, BGI Genomics Claim The company does not have access to personal data of American customers and has no ties to the Chinese military or government.
In 2023, one of BGI Genomics’ subsidiaries, Massachusetts-based BGI Americas, changed its name to Innomics, according to the WSJ. Several federal lawmakers in April said Innomics was trying to “avoid regulatory oversight” by changing its name and called on the Department of Defense to blacklist the company along with BGI Genomics.
According to the WSJ, Congress is currently considering new legislation that would completely ban Chinese drone maker DJI in the US, warning that the company may be storing data and passing it on to Beijing. DJI denies these allegations, despite previous investigations implicating the drone maker in receiving funding from the Chinese Communist Party and in the surveillance of persecuted religious minorities in China’s Xinjiang Uighur Autonomous Region.
(Photo by Sean Gallup/Getty Images)
According to the WSJ, DJI signed a deal in 2023 with Randall Warnus, an American who previously worked for the company, and another Chinese drone company, Ortel Robotics, to continue selling their technology. DJI licensed the technology for at least two drone models to Warnus, allowing him to sell them in the US through his startup company, Anzu Robotics.
Warnus told the WSJ that Anzu Robotics stores data only in the United States, not in Beijing.
“The overall intention was to comply with U.S. requests not to operate Chinese drones on U.S. soil,” he told the Journal.
Still, some lawmakers are concerned that DJI is using the deal to remain in the US, with Rep. Elise Stefanik, who spearheaded the bill to ban DJI, calling it a “desperate attempt” to evade sanctions, according to The Wall Street Journal.
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