State-backed Hikvision is now the largest surveillance company in the world with links to Xinjiang’s detention camps
By Gordon Watts 15 October 2019
There are surveillance cameras and then there is Hikvision.
Billed as China’s “Big Brother” to quote George Orwell’s dystopian classic Nineteen Eighty-Four, Hangzhou Hikvision Digital Technology has become a major player in tracking the world’s every move.
The scale of the operation is immense. Already the high-tech group is operating in more than 100 countries, including the United States, the United Kingdom, Germany and Brazil, through its local “partners.”
In the UK alone, Hikvision has an estimated 1.3 million security cameras. This, in turn, has raised concerns among British MPs after the company was accused of working with Chinese security forces in the world’s second-largest economy.
A letter released and signed by nine politicians in May stated:
“We share the concerns raised about the role of Hikvision in the UK. Hikvision has been used in Tibet to develop an intrusive police and security apparatus. The system uses facial recognition technology which can distinguish minorities from ‘ethnic’ Han Chinese populations. The sophistication of this technology and its sinister use is a serious cause for concern when considering Tibetans and Uighurs’ safety and security.”
Last week, the group was placed on a blacklist by the US Department of Commerce along with 27 Chinese businesses, including cutting-edge companies in artificial intelligence research, Megvii Technology and SenseTime.
Minorities
They were accused of human rights violations against Uighurs and other Muslim minorities in Xinjiang, an autonomous region in northwest China.
At least one million ethnic people are being held in vast detention camps, according to the United Nations. Beijing has called them “vocational training centers” to combat extremism.
“[We] cannot and will not tolerate the brutal suppression of ethnic minorities within China,” Wilbur Ross, the US Secretary of Commerce, said at the time.
The move by Washington means that the technology firms will be banned from buying US components, such as semiconductors, and blocked from selling telecom or tech equipment in the US.
Hikvision has denied the charges and pointed out through a spokesman that during the “past 12 months” it had tried to “clarify misunderstandings about the company and address their concerns.”
Still, John Honovich, the founder of surveillance video research company IPVM, stressed that the impact on the blacklisted Chinese businesses would be “devastating.”
“Currently, the majority of US components can all be directly replaced or replaced with new designs,” Huang Fanghong, a senior executive at Hikvision, countered. “If it’s necessary, we will design our own chips.”
Yet, this is not the sort of freeze-frame that the organization wants the world to see.
Prospectus
Founded in 2001, the company has its roots in China Electronics Technology Group Corporation. Chairman Chen Zongnian worked in the research division there, while other senior executives came from Huazhong University of Science & Technology.
In 2010, Hikvision was listed on the SME Board for small- and medium-sized enterprises of the Shenzhen Stock Exchange. Up to 42% of the operation is still controlled by state-owned firms with China Electronics Technology HIK Group the biggest shareholder with slightly more than 39%.
An investor prospectus made it clear that the “controlling shareholder” would “continue to be in a position to exert significant influence over our business,” IPVM reported in 2016.
State-backed funding and government contracts have turned Hikvision into the ultimate eyeball on the wall. Nearly 30% of its 50 billion yuan ($7.12 billion) revenue is generated overseas.
“The three largest vendors of Hikvision, Dahua and Axis Communications … have largely grown through organic means. The rate at which they have done this has been impressive. None of these companies were among even the 10 largest vendors in 2005 and Hikvision and Dahua didn’t exist at the turn of the century,” a survey released by multinational research firm IHS Markit, entitled Security Technologies Top Trends For 2019, stated.
With slightly more than 21% of the market, Hikvision became the leading closed-circuit television and video surveillance equipment manufacturer in 2017.
Since then, it has cemented its position with a market value of $42 billion. During the first half of this year, operating revenue was 23.92 billion yuan, a 14.6% jump compared to the same period last year. Net profits increased by 1.6% to 4.22 billion yuan.
But lurking behind the numbers and the company’s rise are its links to China’s security sector, the driving force of domestic revenue.
Two years ago, there were at least 176 million surveillance cameras in the country, IHS Markit estimated. By next year, that is projected to grow to 450 million.
Factory
Blanket coverage has also engulfed Beijing. The Public Safety Bureau confirmed earlier this month that surveillance cameras have mushroomed across “100%” of the capital, state-run China Daily revealed.
Most of them are made by Hikvision at their factory in Hangzhou, the capital of Zhejiang province, through its connections to the ruling Communist Party.
Chairman Chen is a CCP member and a deputy of the National People’s Congress.
Between 2016 and 2017, the company signed public-private partnership contracts worth 1.9 billion yuan with security forces in Xinjiang, according to procurement documents obtained by the Reuters news agency.
Using facial recognition technology, Hikvision became the eyes of the Party during the crackdown on Uighurs and other Muslim minorities.
“The Chinese Communist Party is detaining and abusing more than one million Uighur Muslims in internment camps in Xinjiang,” US Secretary of State Mike Pompeo said on Friday. “The pages of George Orwell’s Nineteen Eighty-Four are coming to life there.”
For the rest of the world, Big Brother could be just a video shot away or a spy in the sky.