Chinese Technology Company Threatens to Sue U.S. Government

BANGKOK — A Nasdaq-listed Chinese technology company specializing in parts for self-driving vehicles is considering legal action against the U.S. government. Hesai Technology Co., well-known for its core product LiDAR road-sensing equipment, has been included in a list of companies supposedly linked to the Chinese military, according to the Pentagon.

Hesai’s LiDAR equipment is widely used in various applications, including passenger and commercial vehicles, autonomous-driving vehicles, and delivery robots. Despite being primarily utilized for civilian purposes, the U.S. Department of Defense decided to add Hesai to its roster of “Chinese military companies,” which now consists of 17 firms.

The updated list also features other prominent Chinese companies, such as Megvii, an artificial intelligence company based in Beijing, and IDG Capital, a major private-equity investment company with stakes in multiple Chinese tech firms. Notably, these Chinese companies have investments from U.S. pension funds and foundations, underscoring their significance in both countries.

Hesai’s CEO, Yifan “David” Li, expressed his dissatisfaction with the decision to include his company on the list, describing it as “unjust, capricious, and meritless.” In a statement, Li emphasized that Hesai is not involved in any military operations and firmly stated that their products are solely designed for civilian use.

While Li did not disclose the specifics of their legal course of action, he accused Hesai’s critics of orchestrating a smear campaign to gain an unfair commercial advantage over the company.

Hesai Technology Co.’s determination to challenge the U.S. government’s decision reflects their commitment to defending their integrity and ensuring fair treatment as a leading technology player in the industry.

Impact on Hesai’s LiDARs in Light of Military Specifications

Hesai, a leading provider of LiDAR technology, recently announced that their LiDARs were not designed to conform to military specifications. In line with this, the U.S. Department of Commerce has classified their products as unsuitable for any military application.

This development has had a significant impact on Hesai’s stock price, which has plummeted to under $4 from its previous value of about $22, reflecting a decline of nearly 82% in the past year.

U.S.-China Trade Relations and Technological Restrictions

The current stance of President Joe Biden’s administration towards China’s access to advanced U.S. technology has been influenced by the trade war initiated by his predecessor, Donald Trump. The Biden administration has upheld the tariffs imposed by Trump while further limiting Chinese access to advanced U.S. technology. Additionally, they have restricted U.S. investments in strategically sensitive Chinese industries and expanded sanctions on major Chinese companies, including Huawei Technologies.

Defense Department’s Vigilance on Chinese Military Companies

The Defense Department regularly updates its list of Chinese military companies to keep track of their associations with civilian entities. This list currently comprises almost 50 companies that demonstrate links between the Chinese military and other entities.

China’s foreign and commerce ministries have expressed their dissatisfaction with the recent expansion of the list, registering their protest against the perceived targeting of Chinese companies.

A Silver Lining for Xiaomi Corp.

In a notable case last year, Xiaomi Corp., a prominent Chinese smartphone manufacturer, utilized legal measures to challenge its inclusion on the blacklist. Their proactive approach proved successful, leading to their removal from the list. Xiaomi Corp., which briefly surpassed Apple Inc. as the world’s third-largest smartphone maker based on sales, vehemently denied any association with China’s People’s Liberation Army.

These developments shed light on the evolving landscape of U.S.-China trade relations, technological restrictions, and the impact on companies like Hesai and Xiaomi Corp.