Hikvision Declares No Subsidies But Financials Show $189 Million Subsidies

By John Honovich, Published 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 run a marketing campaign to counter critical coverage of their company. In a trade magazine interview, a Hikvision General Manager declares:

Hikvision does not receive subsidies from any government or financial institution

It is a definitive statement.

However, Hikvision's 2015 financial report (p.148) clearly lists Hikvision receiving government subsidies:

Indeed, Hikvision's own financials show 2015 China government subsidies of 1,274,249,562.08 RMB, equivalent to ~$189 million USD.

****** / *** ******* ** ******** ** who ***** *** ******** it ***** ****.

Subsidy ********* 

*** **** ***** ********* Hikvision **** *** **** what ** ******** *** certainly ** *******. *** example, ****, *** *** all, ** *** '********** subsidies' ********* ******* *** for ********* *** *** on *******, ***** **** argue ** *** * subsidy. ** *** ***** hand, **** ***** ********* exist **** ***** *** be ******** ******** ** financials, *.*., ******** ****** payments **** *** ******* government ** ********* *** products / ******** ** loans ******** **** *** government (*.*.,********* $* *******). ********, *** ******** in *** ****** *****, the ***** ********** ****** Hikvision ** *** **** 15% ********* ****** ***** *** ******** **%. **** *** **** **********, we ** *** ***** it ** ********* ** ever ********* ********* *** steep *** ********* ***, but *** **** **** they ******* ********** ********* is ************.

Integrity *****

**** ******* ** ** ********* issue. ********** ** *** much *** ********* ***, it ** ********** **** Hikvision ******** ********** *********, since ***** *** ********* report ********* **. **** ******** contradicts *********'* '********' ***** that **** ** "*** ******* ********* **** any ********** ** ********* institution."

** ****** *********** ********* of *** **** ********* can ** ******* **** they *** ******* ** so ******** *** ********* lie ** ***** *********.

Shaken / *******

********* *** ************ **** well ********* *** *** government ********** **** ********* struggling. *** ******** ** have ************ ***** ***** Hikvision's ******** ***** ** their ************ *** ******* to **** *** ******** and ******** **** ******* controversy *** ******** ******, ****** their ***** ***** ***** who ** ******* ** ******.

*** *** *** ********* has ******* *** ********** criticisms ***** ** ************ that **** *** **** what ** ** **** and, ** ****** ********* false ******, **** ** subsidies, ** ********** **** people **** ***** *** Chinese **********'* ******* ** Hikvision - **** ********* cannot ** *******.


Comments (18)

Jon, do you have any factual rebuttal to our analysis? Please share.

Why do all of these articles point the blame at Hikvision corporate (and brand) instead of attacking the few bad apples that are unaware of their corporate dealings? Why not just attack the bad employees, who obviously don't peruse the corporate filings as deeply as you do.

My point is that you haven't found a single shred of evidence of Hikvision doing anything illegal or filing any improper disclosures. All of your articles are about employees who are either unaware of (at best) or trying to spin (at worst) their positions.

Every single disclosure on the Hikvision website seems to be open and transparent.

instead of attacking the few bad apples that are unaware of their corporate dealings? Why not just attack the bad employees

Jon, that quote is from the GM of Hikvision UK and Ireland, who is an authorized representative of the company, in a formal media interview, and the head of Hikvision's second largest overseas market (after the US).

Here is another example of a Hikvision leader denying subsidies in their overseas marketing in the past year:

Jeffrey He is the President of Hikvision North America (the largest overseas market).

The reality is simple, these are statements from authorized senior leaders ultimately coming from corporate / China that the country managers are passing on.

You can feel free to believe there is no single shred of evidence but I am confident that industry people overwhelmingly will see the manipulation that Hikvision is conducting in their overseas marketing as we have examined in Hikvision CEO Admits Hikvision China State-Owned Company and this post.

Jeffery seems like a very nice, genuine guy. My best attempt at defending him is that he must not know every single Hikvision Corporate Chinese filing as well as you do.

My best attempt at defending him is that he must not know every single Hikvision Corporate Chinese filing as well as you do.

This "defense" would make him an idiot. These are not off-the-cuff questions posed by TMZ while walking thru an airport.

These are pre-meditated responses to questions that have been asked before, repeatedly.

If you think that He decided to tackle these questions on his own without any guidance/information from his superiors, he is also immensely brave.

The most likely explanation is that IF you could corner him he would dispute that VAT refeund is truly a subsidy, and that the word 'subsidies' is just used as an accounting 'term-of-art' chosen by auditors and that the others are insignificant and/or internal, not applicable.

In fact look for this type of explanation in his next prepared response addressing 'concerns of some in the media'.

...instead of attacking the few bad apples that are unaware of their corporate dealings.

Jeffery seems like a very nice, genuine guy.

A very nice, genuine bad apple?

Funniest comment heard recently, our Avigilon rep stated that Avigilon will be around longer than Hikvision, who could go out of business any day now.. I feel like I'm living in an alternate reality. When will the Chinese Communist Party go out of business?

When Trump puts America First and Makes America Great Again...as long as we are in alternate realities

Indeed VAT is not falling under "Government Subsidies" from an accounting point of view. Any accountant booking it under this heading should go back to school. Anything filed under this heading should be subsidies, nothing else. Hence, the proof of funding unfair - to say the least - competition is here. A bit like Middle East low-cost carriers and their effect on Western airlines.

Any accountant booking it under this heading should go back to school.

So you are saying Hikvision's 'accountant' is incompetent?

Indeed VAT is not falling under "Government Subsidies" from an accounting point of view

To be clear, this is a VAT refund.

Do you have any Chinese primary sources that counter that this is not a subsidy? Any other explanations of why Hikvision's accountants clearly include this under government subsidies?

John, I do not have this information and cannot judge this from just an amount in the balance sheet.

VAT refund in China is essentially a government subsidy on a massive scale. Here is the VAT mechanism in China:

1. Normally, almost all goods in China are subject to certain VAT rates: 17%, 13%, 6% under different scenario. For Hik, it is 17%.

2. VAT has the input component and the output component. When Hik procures raw materials for making cams, it pays 17% VAT on the invoice price to the suppliers; when Hik sells finished goods to customers, it charges 17% VAT on the finished products.

If raw material for one finished good costs $100, and the finished good is sold at $200, then VAT paid by Hik (VAT input) is $17, VAT charged against the customer by Hik (VAT output) is $34.

Since Hik already paid $17 on VAT input, it will only have to another $17 VAT to the government from the $34 VAT output.

The net effect of VAT on Hik is zero. Essentially, only the end customer will bear the total amount of VAT.

3. When Hik exports its products, it is qualified for VAT refund. It means that Hik can not charge the oversea customers for VAT at 17%, AND for any VAT input Hik paid to the suppliers, the Chinese government will credit the amount.

This tax refund applies to the majority of the Chinese exporters.

Some suggested readings:



The article linked here is from a respected (by me at least) source, and provides some insights into the underpinnings of the HikVision situation.

Geopolitical Futures - Chinese Government Companies

I am not connected with this source except as a reader.

Call the VAT refund what you will but it is

  1. Given for Hik goods sold thru export
  2. Not given for Hik goods sold domestically
  3. Charged to Hik competitors for goods imported into China

See my post above.

Hikvision UK GM did another interview. This time he restrained his comments and offered no specific rebuttal:

That was the only mention in the entire interview on the government topic.

From a PR perspective, this is likely better since it avoids making factual claims that can be debunked from Hikvision's own financials.

Read this IPVM report for free.

This article is part of IPVM's 6,590 reports, 889 tests and is only available to members. To get a one-time preview of our work, enter your work email to access the full article.

Already a member? Login here | Join now

Related Reports

Hikvision Illicitly Uses Back To The Future In Marketing on Jul 03, 2020
NBCUniversal told IPVM that Hikvision UK's ongoing coronavirus marketing...
Hanwha and Hikvision Selling H.265 Without HEVC Licensing on Aug 19, 2020
IPVM has confirmed that Hanwha and Hikvision do not have H.265 licenses from...
Hikvision Salespeople: We Don't Need A Blackbody on May 13, 2020
Dahua jumped out on its cross-town rival selling fever cameras but Hikvision...
Final Rule Does Not Expand Hikvision Dahua Blacklist on Aug 14, 2020
The final White House rule (200.216) has been added and contrary to the...
School District Admits Not Following FDA Guidelines With 144, No Blackbody, Hikvision Fever Cameras on Aug 21, 2020
The Baldwin County School District has admitted it is not following FDA...
White House Expands Dahua Hikvision Blacklist To Federal Funding [Final Rule Reverses] on Aug 13, 2020
The White House is expanding the NDAA to blacklist anyone who "uses" banned...
Fever Cameras Are Medical Devices, Per The FDA, Dahua, Feevr, Hikvision, InVid Contrary Claims Are False on May 28, 2020
Fever cameras are medical devices, despite what euphemisms various sellers...
Ink Labs Relabels China YCX Fever Camera And Steals Dahua's Marketing on Jul 30, 2020
A US company marketed a 'thermal temperature scanner' as its own, selling...
Worst Camera Manufacturers 2020 on May 06, 2020
Which camera manufacturer have integrators had the worst experience with in...
Hikvision Alleges Forehead Only Fever Screening is Smart; It's Actually Dangerous on Oct 09, 2020
Forehead only fever screening violates global standards and increases error...
NDAA Compliant Video Surveillance Whitelist on Aug 10, 2020
This report aggregates video surveillance products that manufacturers have...
Salesforce Drops Dahua and Hikvision on Aug 12, 2020
Salesforce has dropped Dahua and Hikvision as customers, forcing the two mega...
Honeywell 30 Series and Vivotek NVRs Tested on Oct 21, 2020
The NDAA ban has driven many users to look for low-cost NVRs not made by...
Alabama Schools Million Dollar Hikvision Fever Camera Deal on Aug 11, 2020
The Baldwin County, Alabama public schools purchased a $1 million, 144-camera...
CDW Sells School District 36 Low-Res, No Blackbody Hikvision Fever Cameras With Federal Funds on Oct 01, 2020
Mega IT distributor CDW sold low-resolution Hikvision fever cameras with no...

Recent Reports

GDPR Impact On Temperature / Fever Screening Explained on Oct 22, 2020
What impact does GDPR have on temperature screening? Do you risk a GDPR fine...
Security And Safety Things (S&ST) Tested on Oct 22, 2020
S&ST, a Bosch spinout, is spending tens of millions of dollars aiming to...
Nokia Fever Screening Claims To "Advance Fight Against COVID-19" on Oct 22, 2020
First IBM, then briefly Clorox, and now Nokia becomes the latest Fortune 500...
Deceptive Meridian Temperature Tablets Endanger Public Safety on Oct 21, 2020
IPVM's testing of and investigation into Meridian Kiosk's temperature...
Honeywell 30 Series and Vivotek NVRs Tested on Oct 21, 2020
The NDAA ban has driven many users to look for low-cost NVRs not made by...
Avigilon Aggressive Trade-In Program Takes Aim At Competitors on Oct 20, 2020
Avigilon has launched one of the most aggressive trade-in programs the video...
Mexico Video Surveillance Market Overview 2020 on Oct 20, 2020
Despite being neighbors, there are key differences between the U.S. and...
Dahua Revenue Grows But Profits Down, Cause Unclear on Oct 20, 2020
While Dahua's overall revenue was up more than 12% in Q3 2020, a significant...
Illegal Hikvision Fever Screening Touted In Australia, Government Investigating, Temperature References Deleted on Oct 20, 2020
The Australian government told IPVM that they are investigating a Hikvision...
Panasonic Presents i-PRO Cameras and Video Analytics on Oct 19, 2020
Panasonic i-PRO presented its X-Series cameras and AI video analytics at the...
Augmented Reality (AR) Cameras From Hikvision and Dahua Examined on Oct 19, 2020
Hikvision, Dahua, and other China companies are marketing augmented reality...
18 TB Video Surveillance Drives (WD and Seagate) on Oct 19, 2020
Both Seagate and Western Digital recently announced 18TB hard drives...
Watrix Gait Recognition Profile on Oct 16, 2020
Watrix is the world's only gait recognition surveillance provider IPVM has...
Intel Presents Edge-to-Cloud Ecosystem for Video Analytics on Oct 16, 2020
Intel presented its processors and software toolkit for computer vision at...