HONG KONG—The world’s largest maker of surveillance equipment has long-established links to China’s military, including conducting a study with Chinese weapons experts and supplying cameras and drones to the country’s air force, according to a report by a surveillance-industry research company.

The findings by IPVM shed fresh light on Hangzhou Hikvision Digital Technology Co. 002415 0.48% , which has disputed as baseless a decision by the U.S. Defense Department last year to place it on a blacklist of companies with alleged ties to China’s armed forces.

According to public documents and online materials found by IPVM, Hikvision sold drones and other accessory equipment to the Chinese air force in 2019 and was considered a top-tier supplier to the nation’s military in 2014. In March, a drone-jamming rifle, emblazoned with a Hikvision logo, was shown on state television being held by a soldier kneeling in rough terrain and testing equipment for use in extreme conditions such as subzero temperatures or high altitudes.

Hikvision’s website also carried a report on how the company’s technology could improve the performance of Chinese missile, tank and other weapons systems, citing a study done jointly with commanders and weapons experts from the People’s Liberation Army. The study proposed the use of Hikvision cameras to record drills and improve weapons accuracy. The report was taken down from Hikvision’s website for several days this month after The Wall Street Journal contacted the company for comment.

IPVM, an independent research company based in Bethlehem, Pa., that focuses on the surveillance industry, shared its findings with the Journal, which independently corroborated them.

“Hikvision has partnered with the PRC’s military, earning top PLA supplier status, collaborating on PLA research, and more,” according to IPVM, using the abbreviation for the People’s Republic of China.

In response to IPVM’s findings, a Hikvision spokesman said: “Hikvision, like many global technology companies, manufactures commercial devices and solutions that some can be considered dual-use goods serving general video-surveillance purposes.” Dual-use goods are products that have both civilian and military applications.

“Not now, and not ever, has Hikvision conducted research and development work for Chinese military applications,” the spokesman said. “Any instances of such by any of our employees were done so in a personal capacity and not at the direction of the company.”

Hikvision is the world’s largest maker of video-surveillance equipment by sales, according to a&s magazine, an industry publication.

The Chinese Communist Party’s Central Military Commission, which manages military procurement, didn’t respond to a request for comment. China’s Foreign Ministry has said the Pentagon unfairly targets Chinese companies and that the U.S. encourages similar cooperation between private enterprise and its military.

Members of the People’s Liberation Army in Shanghai this month. Hikvision’s website cites a study done jointly with commanders and others from the army.

Photo: alex plavevski/Shutterstock

Like the U.S., China relies on private companies to supply its military. Pressure on Chinese companies, especially in the tech sector, to take on defense work has risen in recent years. They have little recourse to say no to the authoritarian government, which is promoting what it calls military-civil fusion to upgrade military capabilities.

The U.S. Defense Department hasn’t given specific reasons for its decision to add Hikvision to its military list, though criteria include affiliation with or ownership by the Chinese military. The designation prevents Americans from investing in any securities issued by the company.

The Pentagon didn’t respond to a request for comment. The Trump administration widened an effort to deny American financing and technology to companies that would assist China’s ascent as a global competitor, and the Biden administration has said it would take a tough-minded approach to competition with China.

Kyle Sullivan, China practice lead at Martin+Crumpton Group, a risk-intelligence firm in Arlington, Va., said Hikvision has clearer ties to the Chinese state than some other companies targeted by the Pentagon, such as Xiaomi Corp. The smartphone maker won a legal battle in the U.S. to get removed from the blacklist.

“Hikvision’s ownership ties to the Chinese government, coupled with its surveillance technology, personify fears in Washington about China’s military-civil fusion program and make it a more obvious candidate” for the Pentagon to target, he said.

Hikvision’s largest shareholder is a unit of state-owned conglomerate China Electronics Technology Group Corp., or CETC.

In the U.S. Hikvision is known mainly as a supplier of security cameras for home and business use. In 2017, the Journal reported that the company’s equipment was in use in sensitive U.S. facilities. The U.S. military subsequently removed its cameras from a base in Missouri.

The Trump administration later took numerous actions against Hikvision. In 2018, Congress passed a law barring the U.S. government from buying goods or services from the company. The following year, the Commerce Department added Hikvision and other Chinese security and artificial-intelligence companies to its export blacklist.

The U.S. actions against Hikvision haven’t significantly affected its financial standing. Last year, the company’s revenue increased 10% to the equivalent of about $9.9 billion, a slower pace of growth than in previous years. Still, its Shenzhen-traded stock hit a high in January this year.

The IPVM report also lists products on Hikvision’s Chinese-language website that are marketed for military use. They include detection systems intended for the undercarriage of vehicles and a thermal-imaging camera for border troops and other uses.

In 2014, Hikvision was listed as a Tier 1 supplier to the Chinese military, a scoring system that rates a company on its time in existence, revenue and net assets, according to a 2015 Chinese state-media report cited by IPVM. The Hikvision spokesman said the company sells primarily through third-party distributors and rarely does direct sales.

China’s Military Technology

Read more on China’s tech, selected by editors.

Write to Dan Strumpf at [email protected]

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This post first appeared on wsj.com

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