Chinese companies facing US scrutiny have devised a clever tactic to maintain their American presence: rebranding and adopting new names to evade legal sanctions. This strategic maneuver enables them to continue operating in the US market while sidestepping regulatory hurdles.
Investigation Uncovers Web of Shell Companies and Legal Loopholes
A recent report exposed Chinese firms exploiting shell companies, new identities, and legal workarounds to persist in the US market. According to experts, these companies adapt and evolve their business strategies to evade restrictions and maintain a foothold in the American market.
Case Studies: Hesai and BGI Genomics’ Rebranding Efforts
Hesai, a Chinese company specializing in Lidar sensor technology, established an American subsidiary, American Lidar, to manufacture and distribute its products in the US. However, the Defense Department’s designation of Hesai as a Chinese military company led to a significant decline in its stock price and barred the US military from procuring its products. Similarly, BGI Genomics, a Chinese genomics company, rebranded its subsidiary as Innomics to distance itself from US scrutiny.
Congress Considers Comprehensive Limits on Chinese Tech Companies
The US government is contemplating broader restrictions on Chinese companies, including a potential ban on drones manufactured by SZ DJI. Representative Elise Stefanik has vowed to hold DJI and its affiliates accountable, emphasizing the need for stringent oversight.
Expert Analysis: Targeting Vulnerable Tech Sectors Over Individual Companies
Derek Scissors, a senior fellow at the American Enterprise Institute, advocates for a more comprehensive approach, suggesting that targeting vulnerable tech sectors is a more effective strategy than focusing on individual companies. By addressing the root causes of security concerns, the US government can better protect its interests and prevent Chinese companies from evading scrutiny.
Companies Decline to Comment on Rebranding Efforts
DJI, American Lidar, Innomics, and BGI Genomics declined to comment on their rebranding strategies and efforts to evade US sanctions.
In Essence
Chinese companies facing US scrutiny have employed rebranding and legal workarounds to maintain their American presence. As the US government intensifies its efforts to regulate Chinese companies, it is crucial to adopt a comprehensive approach that addresses the root causes of security concerns and prevents companies from evading scrutiny.
