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.

********* ******* **** **** receive ** ********* *** their *** ********* ******* show $*** ******* ** subsidies ** ****.

********* '********' *** *** a ********* ******** ** counter ******** ******** ** their *******. ** * trade ******** *********, * Hikvision ******* ***************:

********* **** *** ******* subsidies **** *** ********** or ********* ***********

** ** * ********** statement.

*******,*********'* **** ********* ****** (p.148)******* ***** ********* ********* government *********:

******, *********'* *** ********** show **** ***** ********** subsidies ** *,***,***,***.** ***, ********** ** ~$189 ******* ***.


****** / *** ******* ** ******** ** 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.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

First US State, Vermont, Bans Dahua and Hikvision on Feb 21, 2019
The first US state, Vermont, has issued a ban on a number of Chinese and Russian manufacturers including the world's 2 largest video surveillance...
Huawei Sues US Government Over NDAA Ban on Mar 07, 2019
Chinese telecom giant Huawei is suing the US government over the NDAA ban, arguing that key provisions in it are unconstitutional.  NDAA Section...
Hanwha Tax Evasion Probe, Camera Division Implicated on Mar 19, 2019
A Hanwha group subsidiary was raided as part of a tax evasion probe. While a Korean news media report listed the raided entity as 'Hanwha...
US Drafting Separate Rule for NDAA Dahua/Hikvision 'Blacklist' on Mar 14, 2019
The most debated provision of the NDAA ban of Dahua, Hikvision, Huawei, et al. is the so-called 'blacklist' provision which would ban any company...
Hikvision VP On Muslim Oppression on May 14, 2019
Hikvision has won tens of millions of dollars, at least, in direct contracts with the Chinese government that oppresses Muslims, including a forced...
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...
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...
In China, Foreign AI Companies Banned or Disadvantaged, Says Top China AI Company on Aug 28, 2019
Non-China (PRC) companies are prejudiced and unfairly targeted inside of the PRC's booming AI market, which not only denies them revenue inside of...
Dahua And Hikvision Accept PRC Government Officials on Sep 26, 2019
Hikvision and Dahua are among the 100 companies accepting PRC government officials as part of a new initiative to boost manufacturing that has...
Hikvision CEO And Vice-Chair Under PRC Government Investigation on Nov 14, 2019
In a surprising and globally covered move, Hikvision CEO Hu Yangzhong and Vice-Chairman Gong Hongjia are being investigated by China's securities...

Most Recent Industry Reports

Hanwha Wisenet X Plus PTRZ Tested on Feb 14, 2020
Hanwha has released their PTRZ camera, the Wisenet X Plus XNV-6081Z, claiming the "modular design allows for easy installation". We bought and...
PRC Warns Against China Video Surveillance Hacks, Hikvision Targeted on Feb 14, 2020
Hackers are targeting China video surveillance manufacturers and systems, according to the PRC's main cyber threat monitoring body. The hackers...
IPVM Conference 2020 on Feb 13, 2020
IPVM is excited to announce our 2020 conference. This is the first and only industry event that will be 100% sponsor-free. Like IPVM online, the...
Bosch Dropping Dahua on Feb 13, 2020
Bosch has confirmed to IPVM that it is in the process of dropping Dahua, over the next year, as both IP camera contract manufacturer and recorder...
BluB0X Alleges Lenel, S2, Software House Are Dinosaurs on Feb 13, 2020
BluB0X is running an ad campaign labeling Lenel, S2, Software House, Honeywell, AMAG and more as dinosaurs: In a follow-up email to IPVM,...
London Live Police Face Recognition Visited on Feb 13, 2020
London police have officially begun using live facial recognition in select areas of the UK capital, sparking significant controversy. IPVM...
Converged vs Dedicated Networks For Surveillance Tutorial on Feb 12, 2020
Use the existing network or deploy a new one? This is a critical choice in designing video surveillance systems. Though 'convergence' was a big...
Monitoreal "Completely Autonomous" Home AI Tested on Feb 12, 2020
Monitoreal claims to allow users to "see the things you want (people, vehicles, animals) and ignore the things you don’t”, using AI to distinguish...
Cisco Video Surveillance Is Dead, Long Live Cisco Meraki Video Surveillance on Feb 11, 2020
A dozen years ago much of the industry thought that Cisco was destined to dominate video surveillance. They stumbled repeatedly, failing. Now it is...
BICSI For IP Video Surveillance Guide on Feb 11, 2020
Spend enough time around networks and eventually someone will mention BICSI, the oft-referenced but only vaguely known standards body prevalent in...