Hikvision $6 Billion: Doubles Chinese Government Funding

By: John Honovich, Published on Aug 18, 2016

Hikvision has announced a new $3+ billion line of credit, in addition to the previous $3+ billion one from December 2015.

This new one is from the Export-Import Bank of China (Exim). In this note, we examine Exim's central role within the Chinese government, how Exim funds various China government interests, including in Iran and Africa, and how Hikvision benefits from the government backing

China Exim Overview

Exim is, by their own admission, owned and run by the Chinese government as they declare on their about page:

The Export-Import Bank of China is a state bank solely owned by the Chinese government and under the direct leadership of the State Council.

Their goal is to help Chinese state owned manufacturers like Hikvision, as they note:

The Bank's main mandate is to facilitate the export and import of Chinese mechanical and electronic products

And as the official Chinese government website notes:

The China Exim Bank must play its role in stabilizing growth, restructuring, boosting exports and implementing the “going-out” strategy

The 'Going-out' strategy is important to understand Hikvision's fit here. The Chinese government had made it a priority to subsidize and underwrite the global expansion of their companies across the world.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

Bank Focus is Policy, Not Making Money

China Exim is a 'policy' bank, not a 'regular' commercial bank. It pursues the policies of the Chinese government.

Here are some examples:

Unlike a regular bank, making profits on loans is not the key factor of success for Exim. China Exim is one of three China policy banks, including the CDB who had already authorized ~$3 Billion USD to Hikvision in December 2015.

Quasi Subsidy for Hikvision

As a China economic expert noted to us:

Because they are a "policy" bank, they are not viewed as a profit center like ICBC or other commercial lenders. This essentially allows them to transfer the profits to their customers. It is a quasi subsidy.

Hikvision / Exim Agreement Overview

The official Chinese announcement declares it a 'strategic cooperation announcement' between the Chinese government bank and the Chinese government owned company, Hikvision. The key financial component is providing a comprehensive line of credit up to 20 billion RMB (~$3 billion USD) to Hikvision over the next 5 years.

While the announcement lacks details, China Exim commonly provides concessional loans at below market rates and more lenient terms to support the policies they are backing.

Hikvision USA wrongly claims that this deal is a "testament to the fact that the financial markets recognize Hikvision" but, given that China Exim is a key part of the Chinese government, what it really is, even more powerfully, an endorsement of the Chinese government in Hikvision's future expansion.

Chinese Government Benefits

Beyond the 'soft power' benefits that China desires and gets when its subsidiaries expand globally, the China government also generates hard currency from underwriting Hikvision exports, as a China economic expert noted to us:

They maybe incurring local currency losses on the subsidies but they get hard currency inflows.

Currency outflows are a major political and economic problem for the Chinese government (see China's Exodus of Capital) so driving Hikvision exports helps counteract that.

Hikvision Benefits / Industry Danger

Not only is the Chinese government giving massive money to help Hikvision's expansion, they are clearly signaling that Hikvision's global expansion is an important political goal for the country.

How they will use the new money and how much of it remains to be seen, but given their track record of aggressive price cuts and significant spending this indicates another wave of global expansion that many video surveillance companies are unlikely to survive.

Vote - Fair?

Is it fair that the Chinese government is funding billions to Hikvision?

18 reports cite this report:

Embattled $400 Million China Funded Philippines Surveillance System Proceeds on Jun 13, 2019
An embattled 12,000 camera surveillance system project that will cost ~$400 million will proceed.  The project contract was awarded, had its...
Hikvision Removed From US Army Base, Congressional Hearing Called on Jan 12, 2018
Hikvision has been removed from a US Army Base and a US congressional committee is planning a hearing on cybersecurity risks and specifically,...
Morten Tor Nielsen Defends Hikvision on Jun 12, 2017
Morten Tor Nielsen, veteran software developer for Prescienta working for OnSSI, has posted "In Defence of Hikvision". As Nielsen explains...
Hikvision Gives IPVM An 'F' on Jun 06, 2017
Two weeks after Hikvision called IPVM 'absolutely unethical' and 'anti-everything', Hikvision has given IPVM, in their words, an 'F'. Hikvision...
Hikvision Attacks IPVM on Mar 20, 2017
Hikvision has attacked IPVM repeatedly over the last month, both in the international press and in its dealer communications. Attacks Listed On...
'Dirty': Hikvision Attacks Genetec on Feb 20, 2017
Hikvision is angry at the growing public awareness that Hikvision is owned by the Chinese government. They took aim at Genetec,...
Hikvision Launches Kits, Slashing Prices 40% on Feb 02, 2017
In an unprecedented move, even for Hikvision, the China government owned and funded manufacturer has slashed their existing prices by 40% as part...
Hikvision Discontinuing Online Service on Dec 12, 2016
Hikvision has declared it will discontinue its Hikvision online service, just days after IPVM's Hikvision Cloud Security Vulnerability...
Hikvision CEO Declares 'We Do Not Cut Rates" on Dec 02, 2016
Hikvision has led another press trip to China, and this time Hikvision's CEO is sharing insights into their competitive strategy, including...
Hikvision Removed From US Embassy Afghanistan on Nov 22, 2016
Hikvision cameras have been removed from the US Embassy Afghanistan and a procurement for more Hikvision cameras has been cancelled, after IPVM's...
China "Unswerving Leadership Over State-Owned Enterprises" Like Hikvision on Oct 18, 2016
The PR agency of the Chinese government declared: President Xi Jinping stressed the Communist Party of China's (CPC) unswerving leadership over...
Hikvision Declares No Subsidies But Financials Show $189 Million Subsidies on Oct 13, 2016
Hikvision alleges that they receive no subsidies but their own financial records show $189 million of subsidies in 2015. Hikvision 'overseas' has...
Hikvision Chairman Tours With Chinese Government Boss on Sep 28, 2016
Two China Communist senior officials toured Europe this summer, one was Hikvision's Chairman and the other was his boss, SASAC Director. In this...
US Embassy Requires Hikvision Cameras on Aug 29, 2016
The US Embassy in Kabul Afghanistan has required only Hikvision cameras in a new US federal government bid. However: Hikvision was founded...
Hikvision Chinese Government Origin And Control on Aug 29, 2016
Hikvision originated from a Chinese government research institute. This is uncommon in the West but frequent in China (though Hikvision is the...
Hikvision 20% Price Cut Twice In A Month on Aug 23, 2016
Days after celebrating the Chinese government's commitment of up to $3 billion USD more in funding, Hikvision USA is now launching up to 20% across...
FLIR Expands Enterprise Distribution Through ADI on Aug 22, 2016
FLIR and Hikvision have been the two top-stocked video brands at ADI, according IPVM analysis and ADI Awarded FLIR "Vendor Of The Year" in January...
Hikvision And The Chinese Government on Dec 07, 2015
Here are the facts about Hikvision's China government ownership. #1 Fact - Hikvision CEO Admits China Government Ownership In the China...
Comments (92) : PRO Members only. Login. or Join.

Related Reports

China Dahua Replaces Their Software With US Pepper on Aug 22, 2019
What does a US government banned company do to improve its security positioning in the US? Well, Dahua is unveiling a novel solution, partnering...
Uniview Beats Intel In Trademark Lawsuit on Aug 19, 2019
Uniview has won a long-running trademark lawsuit brought by Intel, with Beijing's highest court reversing an earlier Intel win, centered on...
Biometrics Usage Statistics 2019 on Aug 13, 2019
Biometrics are commonly used in phones, but how frequently are they used for access? 150+ integrators told us how often they use biometrics,...
US Government Ban of Dahua, Hikvision, Huawei Takes Effect Now on Aug 13, 2019
The 'prohibition on use or procurement' of Dahua, Hikvision and Huawei products and 'essential components' take effect today, August 13, 2019, one...
Hikvision Global News Reports Directory on Aug 11, 2019
Hikvision has received the most global news reporting of any video surveillance company, ever, ranging from the WSJ, the Financial Times, Reuters,...
Stanley Makes "Multi-Million Dollar Investment" Into Banned Hikvision Products on Aug 09, 2019
Just days from the US government ban going into effect, US mega-corporation Stanley has dramatically increased its imports of banned Hikvision...
Indonesia Security Association Chairman Interview on Aug 01, 2019
Indonesia is a huge country with a population close to the US and a fast-growing economy. Its security industry is also growing rapidly but faces...
Hikvision Cameras Covering Concentration Camps on Jul 29, 2019
Hikvision cameras monitoring a concentration camp were shown in a recent BBC investigation: The video excerpt shows the Hikvision cameras and...
Australia Security Full Show Report on Jul 25, 2019
IPVM went to Australia attending the 3 days of the Australia Security Exhibition: This was held at the ICC Sydney, as shown below: In this...
History of Video Surveillance on Jul 19, 2019
The video surveillance market has changed significantly since 2000, going from VCRs to ab emerging AI cloud era.  The goal of this history is to...

Most Recent Industry Reports

TMA Apologizes to Amazon / Ring on Aug 23, 2019
Not only is Amazon / Ring making major incursions into the residential security market, the organization representing the biggest incumbents, The...
China Dahua Replaces Their Software With US Pepper on Aug 22, 2019
What does a US government banned company do to improve its security positioning in the US? Well, Dahua is unveiling a novel solution, partnering...
Security Integrators Outlook On Remaining Integrators In 2025 on Aug 22, 2019
The industry has changed substantially in the last decade, with the rise of IP cameras and the race to the bottom. Indeed, more changes may be...
First GDPR Facial Recognition Fine For Sweden School on Aug 22, 2019
A school in Sweden has been fined $20,000 for using facial recognition to keep attendance in what is Sweden's first GDPR fine. Notably, the fine is...
Anyvision Facial Recognition Tested on Aug 21, 2019
Anyvision is aiming for $1 billion in revenue by 2022, backed by $74 million in funding. But does their performance live up to the hype they have...
JCI Sues Wyze on Aug 21, 2019
The mega manufacturer / integrator JCI has sued the fast-growing $20 camera Seattle startup Wyze. Inside this note: Share the court...
Dahua 4K Camera Shootout on Aug 20, 2019
Dahua's new Pro Series 4K N85CL5Z claims to "deliver superior images in all lighting and environmental conditions", but how does this compare to...
ZK Teco Atlas Access Control Tested on Aug 20, 2019
Who needs access specialists? China-based ZKTeco claims its newest access panel 'makes it very easy for anyone to learn and install access control...
Uniview Beats Intel In Trademark Lawsuit on Aug 19, 2019
Uniview has won a long-running trademark lawsuit brought by Intel, with Beijing's highest court reversing an earlier Intel win, centered on...
Suprema Biometric Mass Leak Examined on Aug 19, 2019
While Suprema is rarely discussed even within the physical security market, the South Korean biometrics manufacturer made global news this past...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact