Trump administration claims Huawei backed by Chinese military

US has threatened sanctions against 20 Chinese companies on a trade blacklist, citing security concerns

Public surveillance cameras are mounted to a pole in front of Huawei Technologies' new store in Shanghai, China, on Wednesday, June 24, 2020. The store is Huawei's largest in the world, with a businesShow more

The Trump administration has come to the conclusion that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision, are owned or controlled by the Chinese military, laying the groundwork for new US financial sanctions.

Washington placed Huawei and Hikvision on a trade blacklist last year over national security concerns and has led an international campaign to convince allies to exclude Huawei from their 5G networks.

A Department of Defence document lists 20 companies operating in the United States that Washington alleges are backed by the Chinese military.

The document also includes China Mobile Communications Group and China Telecommunications Corp as well as aircraft manufacturer Aviation Industry Corp of China.

The designations were drawn up by the defence department, which was mandated by a 1999 law to compile a list of Chinese military companies operating in the United States, including those “owned or controlled” by the People’s Liberation Army that provide commercial services, manufacture, produce or export.

The Pentagon’s designations do not trigger penalties, but the law says the president may impose sanctions that could include blocking all property of the listed parties.

Huawei, China Mobile, China Telecom, AVIC and the Chinese Embassy in Washington did not respond to requests for comment.

Hikvision called the allegations were “baseless,” noting it was not a “Chinese military company,” and had never participated in any R&D work for military applications but would work with the United States government to resolve the matter.

The Pentagon has come under pressure from lawmakers of both US political parties to publish the list, amid rising tensions between Washington and Beijing over technology, trade and foreign policy.

Last September, top US Senate Democrat Chuck Schumer, Republican Senator Tom Cotton and Republican Representative Mike Gallagher penned a letter to Defence Secretary Mark Esper raising concerns about Beijing’s enlisting of Chinese corporations to harness emerging civilian technologies for military purposes.

“Will you commit to updating and publicly releasing this list as soon as possible?” they asked in the letter.

On Wednesday, Mr Cotton and Mr Gallagher praised the defence department for releasing the list and urging the president to impose economic penalties against the firms.

The White House did not comment on whether it would sanction the companies on the list, but a senior administration official said the list can be seen as “a useful tool for the US Government, companies, investors, academic institutions, and likeminded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”

The list will probably add to tensions between the world’s two largest economies, which have been at loggerheads over the handling of the coronavirus pandemic and China’s move to impose security legislation on Hong Kong, among several points of friction that have worsened this year.