A prominent Chinese technology company, Hesai Technology, is contemplating legal action against the U.S. government for including it in a list of companies that allegedly have ties to the Chinese military. Hesai Technology, which is listed on Nasdaq, specializes in manufacturing LiDAR road sensing equipment used in various applications such as self-driving vehicles, delivery robots, and autonomous driving vehicles.
The U.S. Department of Defense recently added Hesai Technology to its list of 'Chinese military companies,' which now comprises 17 companies. The updated list also includes other well-known entities such as Megvii, an AI company based in Beijing, IDG Capital, a major private equity investment firm with significant holdings in various Chinese technology companies, and several prominent Chinese energy, telecoms, and aviation companies. Notably, some of these companies have U.S. pension funds and foundations among their investors.
Hesai Technology expressed its disagreement with the designation and intends to file a lawsuit against the U.S. government. In a statement, Hesai Technology's CEO, Yifan 'David' Li, denounced the decision as 'unjust, capricious, and meritless.' He emphasized that Hesai Technology does not have any military affiliations and only develops products for civilian use. Li further stated that Hesai's LiDARs are not designed or validated for military purposes, and they do not meet the military specifications defined by the U.S. Department of Commerce.
The company's statement also accused its critics of engaging in a smear campaign aimed at gaining unfair commercial advantage. Hesai Technology asserts that the allegations are baseless and seeks to challenge the decision through legal means. However, no specific details regarding the legal action were provided.
The repercussions of being included in the list have significantly impacted Hesai Technology's stock price, which dropped from approximately $22 to about $4 over the past year. This highlights the repercussions faced by companies due to their inclusion on the U.S. government's list.
The Biden administration has maintained various trade policies initiated by former President Donald Trump, including tariffs imposed during the trade war with China. Additionally, the administration has implemented further restrictions on China's access to advanced U.S. technology, limited U.S. investments in sensitive Chinese sectors, and expanded sanctions on prominent Chinese firms like Huawei Technologies.
The U.S. Department of Defense regularly updates its list of Chinese military companies, which aims to establish transparency and counter potential connections between the Chinese military and civilian entities. China's foreign and commerce ministries have protested against the recent expansion of the list, emphasizing their objections.
It is worth noting that last year, Chinese smartphone manufacturer Xiaomi Corp. was removed from the blacklist after suing the U.S. government and denying any links with the People's Liberation Army of China. Xiaomi briefly surpassed Apple Inc. to become the world's third-largest smartphone maker in terms of sales.
