Hikvision extends fall after report of sanctions

Investors dump shares over fears that the firm may be added to list barring all US dealings

Chinese state-backed surveillance camera manufacturer Hikvision saw its shares in Shenzhen tumble for the second day yesterday following a report that the United States is considering new sanctions against the company over alleged involvement in human rights abuses in Xinjiang.

Investors rushed to dump shares of the Hangzhou-based company after the Financial Times reported the firm might be added to the specially designated nationals (SDN) list.

Hikvision has been on a US trade blacklist since October 2019, which requires US companies to obtain a licence before selling to the Chinese firm. But landing on the SDN list would bar it from dealing with American companies or citizens at all, effectively killing its US business.

Washington has neither confirmed nor denied the FT report.

Hikvision’s shares fell by 9 per cent yesterday after dropping the 10 per cent limit on Thursday.

The company said in an earlier statement it “looks forward to being treated fairly and unbiasedly”. In a Chinese statement cited by local media, it said it did not believe there were sufficient irregularities in its business to merit further punishment by the US government.

“Sanctions don’t solve problems, they create new ones,” Hikvision said in the statement cited by the Securities Times. “If the Chinese [government] implements a sanctions system similar to the SDN list, few international companies would be able to handle it. Hikvision still believes economic globalisation is the best option for humankind.”

The statement echoes Beijing’s long-running stance against Western sanctions.

“China firmly opposes the US using human rights and other excuses to abuse power and domestic laws to irrationally suppress Chinese companies,” Foreign Ministry spokesman Zhao Lijian said on Thursday. “What the US has said is a lie of the century and a smear and slander against China.

“The US should take China’s concerns seriously and stop its bullying practices that use various excuses to sanction and suppress Chinese companies and harm China’s interests. The Chinese government will firmly safeguard the legitimate rights and interests of Chinese companies.”