Pentagon Lists Huawei, Hikvision as Controlled by Chinese Military

The U.S. Department of Defense (DoD) produced an internal document this week listing 20 Chinese companies it believes are owned or controlled by the People’s Liberation Army (PLA).

The list, first reported by Reuters on Wednesday, includes telecom giant Huawei and Hikvision, a top supplier of video surveillance equipment. Both companies were blacklisted by the United States last year over security concerns.

The full list of PLA-owned and controlled companies compiled by DoD reportedly includes: Aviation Industry Corporation of China, China Aerospace Science and Technology Corporation, China Aerospace Science and Industry Corporation, China Electronics Technology Group Corporation, China South Industries Group Corporation, China Shipbuilding Industry Corporation, China State Shipbuilding Corporation, China North Industries Group Corporation, Hangzhou Hivision Digital Technology Co, Huawei, Inspur Group, Aero Engine Corporation of China, China Railway Construction Corporation, CRRC Corp, Panda Electronics Group, Dawning Information Industry Co, China Mobile Communications Group, China General Nuclear Power Corp, China National Nuclear Corp, and China Telecommunications Corp.

The Pentagon has been required by law since 1999 to maintain a list of companies controlled by the Chinese military operating in the United States. Reuters noted that the list itself does not trigger any automatic penalties for the corporations, but could be used by Congress or the White House to impose further trade sanctions. 

The list is not normally made public, but there is bipartisan support in Congress for publishing it, and obviously someone decided to show it to Reuters. Early reports did not make it clear who passed the list along to the media, but prominent China critics Sen. Tom Cotton (R-AR) and Rep. Mike Gallagher (R-WI) applauded the Pentagon for “releasing” the report and hoped it would be expanded beyond the 20 Chinese firms initially included.

“We commend the Department of Defense for releasing this list of Chinese military companies operating in the United States and hope more will soon follow. This report is one piece of a broader campaign our nation must wage against the Chinese Communist Party and its parasitic technology transfer efforts. We urge the President to impose economic penalties against these Chinese military firms. Meanwhile, Congress should update this 1999 law to better address the present-day challenges posed by China’s Military-Civil Fusion strategy,” Cotton and Gallagher said on Wednesday.

Sen. Marco Rubio (R-FL) also welcomed the public release of the Pentagon report, calling it “a start but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party’s activities threatening U.S. economic and national security.”

Senior Trump administration officials confirmed the authenticity of the list after Reuters published it and said it was important for government officials, consumers, and academic researchers to know when they are dealing with companies controlled by the PLA.

“As the People’s Republic of China attempts to blur the lines between civil and military sectors, ‘knowing your supplier’ is critical. This list will be a useful tool for the US government, companies, investors, academic institutions and likeminded partners to conduct due diligence with regard to partnerships with these entities,” Assistant Secretary of Defense for Public Affairs Jonathan Rath Hoffman said on Wednesday. 

The U.S. government has been trying, with mixed success, to persuade allies not to use Huawei equipment for their 5G wireless networks. The British government is currently reconsidering its decision to allow limited Huawei involvement in 5G as security concerns grow and the Chinese Communist Party’s malfeasance during the coronavirus pandemic proves troubling.

Hikvision was the first of the listed Chinese companies to deny its connections to the PLA, insisting it is not a “Chinese military company” and dismissing accusations to the contrary as “baseless.”

“Hikvision strongly opposes the decision by the U.S. government to misapply a never-used provision of a 21-year-old law. Not only is Hikvision not a ‘Chinese military company,’ Hikvision has never participated in any R&D work for military applications,” a company spokesperson said.

Reuters and several other media organizations said the Chinese Foreign and Defense Ministries did not respond when asked for comments.