High-tech Chinese companies are actively diversifying their sourcing and will speed up substituting crucial supplies through indigenous innovations amid the US’ relentless crackdown on the second-largest economy’s rising technology power.
The US Department of Commerce said on Wednesday that the new restrictions on 33 Chinese firms and institutions it announced last month will take effect on Friday, according to Reuters.
On May 22, the US Department of Commerce’s Bureau of Industry and Security added 33 Chinese technology firms, universities and research institutes to its Entity List, banning the companies from accessing US technology exports.
Listed entities are mainly in the artificial intelligence (AI) and facial recognition sectors, and include leading cyber-security firm Qihoo 360, facial recognition software developer CloudWalk Technology, AI startup CloudMinds and the Harbin Institute of Technology.
The move abused export control measures, violated the basic norms governing international relations, interfered in China’s internal affairs and hurt China’s interests, said China’s Foreign Ministry, adding that China deplores and is firmly opposed to the US action.
A CloudWalk spokesperson told the Global Times on Thursday that the firm has sufficient supply chain reserves for the next one or two years, and it has established strategic cooperation with Chinese companies at home.
“Being put on the list does have an impact on our development, but we have prepared to speed up our localization process,” the spokesperson said.
“We cannot say when we will realize full self-reliance given the current situation, and the road ahead needs integrated efforts from the government and all players along the industrial chain to nurture a joint force to withstand the challenge,” he added.
CloudWalk is one of four domestic AI industry unicorns, alongside Megvii, SenseTime and Yitu.
Ge Qi, vice president of CloudMinds, a SoftBank-backed cloud robotics and AI startup, told the Global Times on Thursday that the US government sanctions have structural influence, but the US move will be unable to take down China’s rising high-tech sector.
CloudMinds has expanded its international presence in recent years and has amassed global suppliers, investors and customers. “In this sense, the impact would be structural.”
US’ bullying will only lead high-tech Chinese firms to grow on the path of self-reliance, Ge said, noting that CloudMinds is evaluating the situation to diversify its sourcing of core components.
The firm has more than 1,500 patent applications for 5G, artificial intelligence, blockchain and robot intellectual property rights over independent research and development.
The Trump administration has been tightening its technology exports to China and is recklessly squeezing Chinese tech firms like Huawei, which has leading advantages in 5G technology. In a new move to further contain Huawei, the US in May moved to block shipments of semiconductors from global chipmakers to the Chinese company.
The US’ Entity List has in fact achieved little in containing China’s high-tech rise, which can be seen in the revenues of Hikvision and iFlytek, two Chinese firms that were added to the US trade blacklist last October.
The list included 28 Chinese groups including eight AI tech companies and 20 government entities and universities.
Video surveillance equipment provider Hikvision generated total revenues of 57.66 billion yuan ($8.11 billion) in 2019, an increase of 15.69 percent year-on-year, and net profits of 12.41 billion yuan, up 9.36 percent on a yearly basis, according to the company’s annual earnings report.
Voice recognition champion iFlytek achieved 27.3 percent sales growth in 2019 surpassing 10 billion yuan for the first time.
Robots inspect a transformer substation in Qinhuangdao, North China’s Hebei Province on Thursday. Local power companies are using more robots during the coronavirus epidemic so as to secure power supply. Photo: cnsphotos
