Congressional Letter Calls Out US Companies Supporting Dahua and Hikvision

By: IPVM Team, Published on Mar 11, 2019

A bipartisan Congressional Letter has called out US companies that 'support' or have 'commercial ties' to Hikvision and Dahua and how they are contributing to Beijing's persecution of ethnic minorities.

This raises a hard question: Do US companies with commercial ties to Dahua and Hikvision contribute to human rights abuses?

The March 4, 2019 Letter from the US House Committee on Foreign Affairs reiterates the calls for sanctions for human rights abuses, directly naming Hikvision and Dahua, as the excerpt below shows:

Of particular concern are reports of U.S. companies that may be contributing to Beijing’s persecution of Uyghurs through their support or commercial ties to Hikvision and Dahua—two Chinese tech giants that have profited from the surge of security spending in Xinjiang. [emphasis added]

$1+ Billion Contracts

An IPVM investigation found more than a billion dollars in contracts for Dahua and Xinjiang in the province where the persecution is most intense. Given the PRC's constraints on public disclosure and increasing censorship of such project documentation, the total is almost certainly even higher but not feasible to determine how high.

Because of these ties, the Trump administration is considering sanctions on various entities and officials, including Hikvision and Dahua, which could result in the end of their US operations/dealings with US companies.

US Company Suppliers - Intel, NVIDIA, Seagate, Western Digital

Hikvision and Dahua have extensive supplier relationships with large American tech firms, chiefly:

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US Company Support - Dealers, Distributors

Many players in the US video surveillance industry have benefited greatly from Dahua and Hikvision. On the distributor side, ADI runs literally non-stop Hikvision sales. Their OEMs, including LTS, do as well. Legions of smaller dealers / trunkslammers lead with Dahua and Hikvision or their various OEMs.

Cybersecurity issues and human rights abuses are ignored, as short term profits are generated.

Abuses Subsidize US Companies

The money that Dahua and Hikvision makes inside of China, including these human rights abusing projects, subsidizes their expansion into the US. The vast majority of Dahua and Hikvision's revenue is from inside China. For example, just 1 of Dahua's Xinjiang projects ($600+ million) generates far more revenue than Dahua sells in a year in all of North America (branded and every OEM customer combined).

Dahua and Hikvision's key competitive drivers are the willingness to spend more and the willingness to cut prices more. These are inherently connected to the vast profits that the companies make inside of China. US companies reselling Dahua and Hikvision products are profiting from this.

Outlook

This Congressional letter underscores that awareness and pressure against China's human rights abuses and the role of their video surveillance manufacturers in such activities. Whether this ultimately results in sanctions cannot be determined but, minimally, this increased attention is a risk to the industry at large and the organizations that support these companies.

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3 reports cite this report:

US Considers Sanctions Against Hikvision and Dahua on May 22, 2019
The US government is considering blacklisting "up to 5" PRC surveillance firms, including Hikvision and Dahua, Bloomberg reported, with human...
"Automated Racism": Chinese Tech Companies Profiling Ethnic Minority on Apr 26, 2019
Scrutiny of Chinese facial recognition providers, including Hikvision, has sharply increased following a New York Times report that they developed...
ISC West 2019 Report on Apr 12, 2019
The IPVM team has finished at the Sands looking at what companies are offering and how they are changing their positioning. See below for 50+...
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