Hikvision Chinese Government Owner CETHIK Exposed

Author: John Honovich, Published on Nov 20, 2017

Hikvision deceives about its Chinese government ownership.

Contrary to their claims about 'independence' and simply having 'shareholders' that are 'state-owned', Hikvision is controlled by a Chinese government entity (CETHIK) that exists specifically for running Hikvision. In this note, we expose this ownership, sharing proof from their own Chinese language records.

This emerged as a significant issue in the WSJ Investigation into Hikvision, with Hikvision responding:

Hikvision deceives about the 'SOE' they note, which is CETHIK. As the last three letters indicate, CETHIK is a Chinese government organization that controls Hikvision. CETHIK, and its government parent, CETC, do not simply 'own' shares, as 'passive' investors in companies. This information is hiding in plain sight, at least in Chinese, and can be reviewed at www.cethik.com.

Same Naming / Group Leadership

Hikvision's Chinese government parent is the "CLP Hikvision Group Limited" (from the cethik.com website). The name clearly references what CETHIK does, it is a government run group centered around Hikvision, as their own graphic shows:

Hikvision Core Of That Group

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CETHIK / CLP Hikvision Group reports:

achieved [2016] revenue of 33.91 billion yuan, a total profit of 8.25 billion yuan.

This contradicts Hikvision's marketing claim of being 'independent' as CETHIK claims Hikvision's revenue as their own. Hikvision reported 2016 revenue of 31.9 billion yuan and profit of 7.4 billion yuan. Hikvision is ~90% of CETHIK's revenue and profit, showing that CETHIK is literally little more than Hikvision.

And if CETHIK was simply a 'shareholder', as Hikvision marketing alleges, than CETHIK could not claim Hikvision's revenue as their own.

CETHIK Claims Hikvision Employees

Moreover, CETHIK claims Hikvision's ~20,000 employees as its own, declaring:

I would like to thank more than 20,000 serving staff for your dedication and hard work and for today's CLP Hikvision.

Again, this contradicts Hikvision's marketing claim that they are 'independent' and that CETHIK is just a 'shareholder'.

Same Chairman For CETHIK and Hikvision

The leader/chairman of CETHIK, Chen Zongnian, is simultaneously the chairman of Hikvision, shown on CETHIK's leader's speech webpage and in the image below:

Controlling Shareholder

Indeed, Hikvision's own financials (see p. 56) expose Hikvision's marketing deception, showing that CETHIK is Hikvision's controlling shareholder.

The fact that these organizations share the same chairman, claims the same revenue and employees shows that CETHIK controls Hikvision.

Do Not Blame Hikvision Overseas Employees

Hikvision overseas employees are not to be blamed here. Hikvision management is hiding this from them as well. Given local employee's general lack of knowledge of Chinese language and Chinese government structure, this is not something they could easily determine for themselves. Worse, these Western employees have it even harder as they are caught in the middle and on the front lines of this.

Blame Hikvision Chinese Leadership

On the other hand, surely Hikvision Chinese leadership (e.g., Hu Yangzhong, Jeffrey He, Jason Yang, etc.) knows all about CETC, CETHIK and how they truly work.

Trust Problems For Hikvision

That Hikvision is willing to deceive people about something that can so clearly and distinctly be disproven by their own Chinese language documentation raises serious concerns. How does one trust a company that does this? And if Hikvision is going to be deceptive about this, what other things, like cybersecurity, are they willing to deceive about?

3 reports cite this report:

"Fear Mongering": Hikvision USA Cybersecurity Director Dismisses Chinese Government Ownership Concerns on Feb 16, 2018
The facts are: The Chinese government created Hikvision and is Hikvision's controlling shareholder. Hikvision's Chairman, a Communist Party...
The 2018 Surveillance Industry Guide on Jan 16, 2018
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Hikvision Removed From US Army Base, Congressional Hearing Called on Jan 12, 2018
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Comments (24)

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How does one trust a company that does this? And if Hikvision is going to be deceptive about this, what other things, like cybersecurity, are they willing to deceive about?

There will always be integrators who just grab what is on the endcap at ADI or stops and asks at the counter for the cheapest camera available. For those folks, the only thing that will shake them from Hik-addiction will be when the subsidization train ends.

Hikvision management is hiding this from them as well. Given local employee's general lack of knowledge of Chinese language and Chinese government structure, this is not something they could easily determine for themselves.

But as you show, the controlling relationship by a Central State-owned entity is in the English language financials:

That’s pretty convincing all on its own.

Yes, and we first shared that evidence more than a year ago here. The name alone is a pretty strong sign of their owner's relationship. The Chinese language materials help demonstrate/visualize the control and how open and clear it is in China.

If it looks like a duck, walks like a duck & quacks like a duck - what is it?

Answer from HIK - It is a fish

And that my friends, is why myself and others left.

Money was great but at some point your soul has to be worth something. The more this information m and day to day company practices were revealed it was hard to reconcile.

Proactively addressing “Nelly” before he mentions it, my current employer has ethics guidelines that requests we not speak ill of competitors. This struck a chord and I had to say something.

Aha, she strikes again: "The mysterious undisclosed trash talker" gets her chord struck and feels compelled to let the world know her feelings.

Excuse me mam, we dont even know who you are.

Its also funny that you have so called ethics about speaking ill will against competitors but you just pretty much did it in a passive aggressive way.

Therefore given your hypocritcal nature, for all we know, your probably still selling Hikvision. Your definetely more than likely selling Dahua. And no telling how many other Chinese manufacturers

If you did "leave" Hikvision, like you so-called did, thats fine, send your customers our way. We'll take care of em! :)

What I want to know is what exactly is "Italian Bo Tech" and who is their mysterious "Love Letter Promise" for? Sounds sinister to me!

What “Love Letter Promise” is a SOE too? I’ll need to find another provider.

what exactly is "Italian Bo Tech"

Here is their website - http://www.eboylighting.com.cn/

They seem to be fairly small, from their about page:

R & D strength of the company, the existing R & D technical personnel more than 50 people, including 5 senior engineers, undergraduate more than 40 people.

Unlike Hikvision, this subsidiary is more than happy to tout its government ownership:

Hi-Tech Electric Co., Ltd. Hangzhou Italian Bo is the leading intelligent lighting control and solutions provider.Founded in 1989, the Department of China Electronics Technology Group Corporation (referred to as China Electronics Branch) under the CLP Hikvision Group in Hangzhou state-owned enterprises, national high-tech enterprises, the Chinese light industry standard-setting unit, Hangzhou Municipal Enterprise Technology Center . "China Electronics Branch" is one of the ten major military groups under the direct administration of the Central Government, and is a large-scale 100 billion-yuan central government enterprise with the strategic goal of "excellent in the domestic market and world-class."

Hi-Tech Electric Co., Ltd. Hangzhou Italian Bo is the leading intelligent lighting control and solutions provider.

Ok everybody, check your smartbulbs...

so, what is the problem? Don't expose your Hik devices to Internet and you're safe. Make sure you monitor internal network as well.

I'd say most of the cheap solutions shouldn't have any other access except VPN to your router and local connection after that. No port mapping, no hik-connect or similar services, no gateway settings for the devices itself

...And no one who sells this trash knows anything about networking, so you have your answer.

I'd say most of the installers don't know either. At least, small security companies or sole contractors. Mount camera, next-next finish. Works somehow, take the money and run

If Hikivsion produces 250,000 devices a day how many of those do you think get installed/secured properly?

Works somehow, take the money and run

Slam trunk, go home!

"[firewall] and you're safe" - not true.

It's important to remember that when we're criticizing the Chinese ownership, it's not just saying that these things may have junky vulnerabilities where you can firewall it off of the internet and everything will be fine. The real risk to your customers and to be frank, our nation, is that they may have functional back doors. In that case, it doesn't matter that you firewall the sucker off from the Internet or disable it's cloud services. Think more along the lines of iodine dns tunneling. Corporate networks with active monitoring struggle to detect such things, let along a camera installer.

I don't want to hijack this thread but as someone who has sold Hik & LTS product, I have been looking for alternatives and at Digital ID View of Dallas, Texas and have found nothing on IPVM, not a single mention. Does anyone have any experience with this company? Thanks?

NOTICE: This comment has been moved to its own discussion: Hikvision/Lts Alternative With Good US Support?

I do not recall ever hearing of Digital ID View before, or seeing them at any of the larger trade shows. From a quick look at their website, they look like an OEM/importer of one or more Asian brands.

What is it that attracted you to their products?

We are looking for products that are not going to be sold directly to consumers that have value added in their US customer support. Prices for many Chinese made product are easily available online. Kits from some look Walmart ready in their packaging graphics. As far as their technology, they seemed to offer products that can mix both HD analog and IP based video streams and networks, allowing use of existing cabling and reducing install labor cost. We have not installed anything from them yet.

When I called the company to discuss some aspects of my first project, I Shin Lee,

who is listed as the trademark owner, was actually on the call along with others.

That was a first for me but possibly not that unusual for other industry veterans.

To be perfectly honest, I would not consider any technology product from a company that is still featuring Flash on their website. It is horribly out of date, and has many security vulnerabilities, and at least to me, send signals of "cheap and out of touch".

The majority of the Chinese import brands are all being sold directly to consumers, it is just a matter of what company logo is silk-screened on the units.

It sounds like you are mostly looking for an "obscure" brand so that customers can not price-shop your quotes?

Honestly, that was the position of this company when I arrived 3 months ago.

That is not what I want going forward. Would you like to offer any recommendations?

Also, Brian, you can't judge a book by it's cover or a company by it's website.

Slick websites abound on the NET but quality US customer support, not so much...

Just returned from a two week trip to China. Of course we flew to Hangzhou as well.
Truly, EVERYONE with any exposure to this industry is aware Hik is controlled and owned by the Chinese Communist Government. Every manufacturer in China aware and they also verbalize it frequently.

It's late so i'll keep it short.
EVERY CCTV distributor, re-seller, installer, online purveyor can sell Hik products. There are no barriers to entry with Hik and the others. So you are not "special" or unique if selling Hik. You are simply spreading a disease.

Any American marketing and selling Hikvision has crossed an ethics line that will likely sometime in the future cause real damage to their reputation. It is refreshing to hear so many firms refusing to cooperate with Hik these days based on their moral compass.
WE CAN ALL sell it, yet more and more refuse due to integrity standards.

For those still supporting Hik, making a quick buck on Hik, "enough already" with the excuses. If its OK to sell a Chinese government owned product, then why are YOU NOT disclosing this key fact in your marketing material? Why? because you know your sales would go to 0.00 if your customers knew the truth.

You can end your Hik addiction.
Its so easy.
Offer Hik and a competing brand simultaneously.
Customer inquires, use that opportunity to sell your other brand after advising them
Hik is owned by the communist China government. You are indeed using their brand awareness to build someone else, to grow a more transparent manufacturer, to grow your future. That's called "justice".

NOTICE: This comment has been moved to its own discussion: EVERYONE With Any Exposure To This Industry Is Aware Hik Is Controlled And Owned By The Chinese Communist Government

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