Entity List Additions Met With Backlash From Chinese Tech Companies, Foreign Ministry

Chinese technology companies and the country’s foreign ministry criticized the U.S.’s decision to add 28 Chinese entities to the Commerce Department’s Entity List, a move that could lead to countermeasures, China said. China denied the allegations in Commerce’s announcement that it was involved in human rights violations of the country's Uighur population and urged the U.S. to “immediately” withdraw the Entity List additions, which it called “serious violation[s]” of international norms. “China will continue to take firm and powerful measures to resolutely safeguard national sovereignty, security and development interests,” a foreign ministry spokesperson said during an Oct. 8 press conference, according to an unofficial translation of a transcript.

Although China strongly objected to the move, it said the measures will not impact planned U.S.-China trade negotiations in Washington this week. “We hope that the U.S. and the Chinese side will work together to promote progress in the consultations,” the spokesperson said.

The spokesperson also said China is still “implementing internal procedures” for its so-called unreliable entity list (see 1906100017) and said details will be “released soon.” Asked by a reporter whether China will retaliate for these additions to Commerce’s Entity List, the spokesperson said: “Are you looking forward to it? Then please keep your attention.”

The Entity List additions (see 1910070076) are effective Oct. 9 and include eight Chinese technology firms, including Hikvision, a major supplier of video surveillance products. Hikvision “strongly opposes” the U.S.’s decision, a company spokesperson said, adding that it "respects" human rights and has been speaking with the Trump administration for the last year to “clarify misunderstandings about the company and address” the administration's concerns.

“Punishing Hikvision, despite these engagements, will deter global companies from communicating with the U.S. government, hurt Hikvision’s U.S. business partners and negatively impact the U.S. economy,” the spokesperson said.

Megvii Technology, a company in the artificial intelligence sector that designs image recognition software, said the U.S. made the decision “without any factual basis,” according to an unofficial translation of a statement. The company said it plans to “communicate with the U.S. government” about the listing.

“In response to the actions of the U.S. Department of Commerce, [we] will take countermeasures in all aspects and continue to provide customers with stable and high-quality services with professional and reliable technology and products,” Megvii Technology said.

Sense Time, or Shangtang Technology, another AI company that specializes in facial recognition, said in a statement that it has “rigorous ethical standards” and opposes Commerce’s decision, according to an unofficial translation. “We strictly abide by the laws and regulations of relevant countries and regions,” the company said. “[We] will actively communicate with all parties on this matter as soon as possible to ensure fair and equitable treatment.”

Xiamen Meiya Pico Information Co., a leader in digital forensics, is “concerned” about Commerce’s decision but said in a statement that it will “not have a material impact on the company’s day-to-day operations,” according to an unofficial translation. Less than 1 percent of its sales revenue comes from “overseas,” the company said.

“At the same time, the company has made relevant preparations in advance for possible market risks,” Xiamen Meiya Pico said. “At present, the company's operations and financial situation are all normal, business development is good and ... steadily advancing.”

Three Chinese technology companies added to the Entity List -- Dahua Technology, IFLYTEK and Yitu Technologies -- did not respond to requests for comment. A fourth company, Yixin Science and Technology Co. Ltd., could not be reached.