'American ○○○'... Name Changed Chinese Companies

Chinese Companies Blacklisted by the US Over Security Concerns
Deceptive Tactics Through Name Changes, Rebranding, and Subsidiary Establishment
"Intense Shell Game Expected Between US Regulators and Chinese Firms"

Chinese companies listed on the U.S. blacklist have been found attempting to evade regulations by changing their company names and pretending to be American companies.

According to the Wall Street Journal (WSJ) on the 29th (local time), a company named "American LiDAR" that appeared near the Big Three automakers in Michigan at the end of last year was revealed to be established by China's Hesai Group. Hesai is a next-generation vehicle laser sensor manufacturer headquartered in Shanghai and was designated earlier this year as a Chinese military-affiliated entity operating in the U.S. This designation was due to concerns that the LiDAR technology could be used to collect sensitive security-related data.

[Image source=Reuters Yonhap News]

Hesai argued that its LiDAR products cannot wirelessly store or transmit images, so they do not pose a threat to U.S. security. After discontinuing the American LiDAR business, Hesai recently filed a lawsuit against the U.S. Department of Defense.

In addition, BGI Genomics, a subsidiary of the Chinese biotechnology company Beijing Genomics Institute (BGI) Group, changed the name of its U.S. subsidiary BGI Americas, located in Massachusetts, to Inomics to avoid sanctions from U.S. regulators. BGI Genomics was listed on the U.S. Department of Defense’s list of Chinese military-related companies in 2022. DJI, which dominates the global drone market, also circumvented local sales restrictions by licensing technology through partnerships with U.S. startups.

Experts point out that although Chinese companies are making various efforts to evade U.S. regulatory networks, there is no clear way to regulate these actions. This is because foreign companies rebranding themselves as American companies or establishing subsidiaries under new names fall within the bounds of the law. Previously, Huawei, the world’s largest telecommunications company, also spun off its U.S. R&D branch "Futurewei" after being listed as a restricted entity by the U.S. in 2019.

Derek Scissors, former member of the U.S.-China Economic and Security Review Commission, stated, "Chinese companies have been hit by the U.S. blacklist, but they can still adjust their business strategies and move in different directions," adding, "Sanctions should target technology sectors rather than individual companies." A House aide investigating Chinese companies in the U.S. predicted, "As the U.S. government uses the blacklist to identify and restrict problematic Chinese companies, the ‘shell game’ will intensify." This suggests that the battle between Chinese companies’ deception and the U.S. regulatory authorities’ efforts to detect it will become increasingly fierce.