China's Hesai to continue lawsuit against US govt over blacklisting

Hesai Technology, one of China’s largest producers of laser sensors for electric vehicles, plans to continue its lawsuit against the United States government after the Pentagon reinstated the company on its blacklist of Chinese firms allegedly linked to the military. According to a report by the Financial Times, Hesai’s co-founder and CEO David Li announced the company’s intent to challenge the decision in court, denying any ties to China’s military.

 

Hesai is among the increasing number of Chinese tech companies pursuing legal action against the US government over their blacklisting. Shenzhen-based drone manufacturer DJI and Shanghai’s Advanced Micro-Fabrication Equipment, a chip equipment group, are also suing the US Department of Defense (DoD), claiming wrongful inclusion on the blacklist.

 

“We are not a military company, nor do we have any connection with the Chinese military or any military body,” Li told the Financial Times. “We operate independently, free from government control or military involvement.”

 

Why is the US blacklisting Chinese firms?

The blacklist stems from the 2021 National Defense Authorization Act, which requires the Pentagon to identify ‘Chinese Military Companies’ operating in the US. The goal is to limit China’s access to advanced technologies that appear to be developed for civilian use but could serve military purposes.

 

This move is part of a broader effort by the US government to curb Chinese technological influence. It also comes amid heightened US scrutiny of Chinese firms suspected of supporting the People’s Liberation Army or posing a national security risk. The US government’s concerns revolve around potential exploitation of ‘dual-use technologies’ – civilian innovations that can be repurposed for military applications.

 

Washington has already restricted China’s access to advanced chip technology and blocked Chinese firms from participating in critical US infrastructure projects. These restrictions have intensified Beijing’s push for technological self-reliance, a priority for Chinese President Xi Jinping.

 

The blacklisting of Hesai  

Hesai Technology was blacklisted in January 2024 and began its legal proceedings against this move in May. Around August, the DoD delisted it, citing a lack of evidence connecting the company to the Chinese military. However, the Pentagon re-listed Hesai based on new information. A US defence official commented that Hesai “continues to meet the requirements for inclusion,” though no further details were provided, the report said.

 

Chinese drone maker SZ DJI Tech sues Pentagon

SZ DJI Tech has been on the DoD’s list since 2022 and has criticised the Pentagon for its refusal to engage in ‘meaningful dialogue’. In an August court filing, DJI said it had tried to engage with the DoD for over 16 months without success. “DJI is not owned or controlled by the Chinese military,” the company said. The company said it manufactures consumer and commercial drones, not military-grade devices. 

 

Beyond Hesai, the US has targeted a range of Chinese tech companies across various industries. Companies specialising in 5G technology, such as Huawei and ZTE, have been banned from supplying equipment to networks in countries like the US, Australia, Japan, India, and Canada. Similarly, TikTok’s future in the US is uncertain, with American lawmakers questioning its safety due to its Chinese ownership, and the US threatening to ban the app entirely.