US sanctions DJI and AI firms including Megvii over alleged Xinjiang human rights abuses
The United States has added eight more Chinese companies, including the world's top commercial drone maker DJI Technology and artificial intelligence (AI) giant Megvii, to an investment blacklist for alleged involvement in the surveillance of Muslim minorities in Xinjiang, the Treasury Department announced on Thursday.
"Today's action highlights how private firms in China's defence and surveillance technology sectors are actively cooperating with the government's efforts to repress members of ethnic and religious minority groups," said Brian Nelson, undersecretary of the Treasury for terrorism and financial intelligence
"Treasury remains committed to ensuring that the US financial system and American investors are not supporting these activities," he added.
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The blacklist places the named entities on the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC), covering those not fully blocked under the Specially Designated Nationals and Blocked Persons List (SDN) list. It bars US investors from taking financial stakes in listed firms.
Chinese AI giant SenseTime was added to the list last week, which led to the postponement of its initial public offering in Hong Kong.
The move to sanction eight more Chinese firms focuses mostly on AI and cloud-computing developers.
The sanctioned companies include AI firms CloudWalk Technology and Yitu Technology; supercomputer maker Dawning Information Industry, which is also known as Sugon; Xiamen Meiya Pico, whose clients are mainly law enforcement departments; Leon Technology, a provider of security software and telecommunication solutions; and NetPosa Technologies, a producer of cloud-based surveillance systems.
DJI declined to comment, and the other firms did not immediately respond to inquiries by the Post.
The inclusion of these companies on the NS-CMIC adds to the headwinds Chinese technology firms face in the US. The administration of former president Donald Trump added dozens of firms to the so-called Entity List, which restricted exports to these firms.
The Treasury Department said that the firms added to the NS-CMIC list on Thursday were also on the Entity List.
Megvii was added in October 2019. Afterwards, the company's attempt in August 2019 to go public in Hong Kong lapsed. Its application to list on the Shanghai Stock Exchange's Star Market was, however, approved in September.
Shortly before the Treasury Department announcement, the Commerce Department put an additional 34 Chinese entities on the list, including China's Academy of Military Medical Sciences and its 11 research institutes.
The Commerce department claimed that the entities were being used by the Chinese military to support "purported brain-control weaponry".
"The scientific pursuit of biotechnology and medical innovation can save lives," said US Secretary of Commerce Gina Raimondo. "Unfortunately, [China] is choosing to use these technologies to pursue control over its people and its repression of members of ethnic and religious minority groups."
"We cannot allow US commodities, technologies, and software that support medical science and biotechnical innovation to be diverted toward uses contrary to US national security," she said.
The additions to the Entity List also included Chinese technology companies that the US says are aiding China's military development and Iran's defense capabilities, including Aerosun Corporation; Fujian Torch Electron Technology Company; Hong Kong Cheung Wah Electronics Technology Company Limited; Shenzhen Rion Technology and Thundsea Electric Limited.
This article originally appeared on the South China Morning Post (SCMP).
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