Exclusive: Trump administration says Huawei, Hikvision backed by Chinese military - document
By Alexandra Alper and Idrees Ali
WASHINGTON (Reuters) - The Trump administration has determined that top Chinese companies, including telecommunications equipment giant Huawei Technologies and video surveillance company Hikvision <002415.SZ>, are owned or controlled by the Chinese military. According to a Reuters document on Wednesday.
A U.S. defense official who spoke on condition of anonymity confirmed the authenticity of the document and said it had been sent to Congress. Washington last year put Huawei on a commercial blacklist for national security concerns and led an international campaign to persuade allies to exclude it from their 5G networks.
The 20 companies Washington claims to be supported by the People's Liberation Army include China Mobile Communications Group <0941.HK> and China Telecommunications Corp, as well as the aircraft manufacturer Aviation Industry Corp from China.
The labels were created by the Department of Defense, which was mandated by a 1999 law to compile a list of companies that "belong to or are controlled by the People's Liberation Army" and that provide, manufacture, produce or export commercial services.
The Pentagon's names do not impose penalties, but the law states that the President can impose sanctions that could include the blocking of all property of the listed parties.
Huawei, Hikvision, China Mobile, China Telecom, AVIC, the White House and the Chinese Embassy in Washington did not respond to requests for comments.
The Pentagon has been pressured by legislators from both US political parties to publish the list as Washington and Beijing tensions over technology, trade, and foreign policy increase.
Last September, senior US Senate Democrat Chuck Schumer and Republican Senator Tom Cotton wrote a letter to Secretary of Defense Mark Esper, raising concerns about Beijing attracting Chinese companies to use new civilian technologies for military purposes.
"Will you commit to update this list and make it public as soon as possible?" they asked in the letter.
The list is likely to lead to tensions between the world's two largest economies, which have fought over the fight against the coronavirus pandemic and China's efforts to enforce Hong Kong security laws, among several friction points that have worsened this year.
China threatened retaliation last week after President Donald Trump signed laws calling for sanctions against the oppression of the Chinese Uighurs.
The list "is a start, but is absolutely insufficient to warn the American people of the governmental and judicial organizations that support the activities of the Chinese government and the Communist Party that threaten US economic and national security," the Republican senator Marco Rubio, who sponsored the Uyghans bill, said in a statement.
SPOTLIGHT ON US TIES
The list will also highlight the relationship between US companies and Chinese companies and their operations in the United States.
In 2012, U.S.-based General Electric Co <GE.N> established a 50/50 avionics joint venture with AVIC, known as Aviage Systems, to supply equipment for China's C919 passenger aircraft.
The Department of Defense also lists China Railway Construction Corporation, China Aerospace Science and Industry Corp. (CASIC) and CRRC, the world's largest passenger train manufacturer, which has contracts in Boston, Philadelphia, Chicago and Los Angeles by undercutting competitors.
The companies did not immediately respond to requests for comments.
Many of the companies listed are already in the crosshairs of the US regulators. Both Huawei and Hikvision were blacklisted by the Department of Commerce last year, forcing their U.S. suppliers to obtain licenses before selling to them.
In April, the U.S. Department of Justice and other federal agencies requested the Federal Communications Commission to revoke China Telecom (Americas) Corp's approval to provide international telecommunications services to and from the United States. The telecommunications authority rejected a similar application from China Mobile last year that has been pending for years.
(Reporting by Alexandra Alper and Idrees Ali; Additional reporting by David Shepardson; Editing by Jonathan Oatis, Howard Goller and Grant McCool)
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