Chinese tech company threatens to sue US over military ties

BANGKOK — A Nasdaq-listed Chinese technology company that makes parts for self-driving vehicles is threatening to sue the U.S. government after being included on a list of companies the Pentagon says have ties to the Chinese military.

Hesai Technology’s core product is LiDAR road detection equipment, used in passenger and commercial vehicles, self-driving vehicles, delivery robots and other applications. It was among 17 companies the US Department of Defense recently added to the list of organizations it considers “Chinese military companies”.

The revised list also includes Megvii, a Beijing-based artificial intelligence company. IDG Capital, a major private equity investment firm with holdings in many Chinese technology companies. and major Chinese energy, telecommunications and aviation companies. Its investors include US pension funds and foundations.

Hesai’s listing was done without any explanation, and the company plans to file a lawsuit, Hesai CEO Yifan “David” Li said in a statement that described the move as “unfair, capricious and without merit.”

“Hesai is not a military company. Hesai products are intended for civilian use only and have never been designed or validated for military use,” he said.

Lee did not elaborate on the company’s plans for legal action. The statement accused Hesai’s critics of waging a smear campaign against him for unfair commercial advantage.

In a statement issued last week, the company said its LiDARs were not designed to comply with military specifications. The US Department of Commerce has designated them as unsuitable for any military application, it said.

Hesai’s share price has fallen to about $4 from about $22 a year ago.

President Joe Biden’s administration has kept in place tariffs imposed by his predecessor Donald Trump after launching a trade war against Beijing in 2018. Under Biden, the US has further limited China’s access on advanced American technology, limited US investment in strategically sensitive Chinese industries and expanded sanctions on leading Chinese companies such as Huawei.

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The Defense Ministry periodically updates its list of nearly four dozen Chinese military companies to address ties between the Chinese military and companies and other entities it says appear to be civilian.

China’s foreign and commerce ministries protested the move after the list was expanded last week.

In 2021, Chinese smartphone maker Xiaomi Corp., which overtook Apple as the world’s No. 3 smartphone maker for a time, was removed from the blacklist after suing the U.S. government, asking to be removed and denying that it has any relationship with the Chinese People’s Liberation Army.

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