Can China’s Spy-Tech Company Recreate Itself?

With their hands tied by the U.S. war on Beijing’s big tech ambitions, China’s surveillance giants are trying to recreate themselves as something less threatening. Can they? Investors seem to think so, but it will be harder than it seems.

The stock prices of Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co., which dominate the market for surveillance cameras, are up around 25% over the past six months. Investors haven’t been fazed by the Trump administration’s attempts to shut them out of procurement by U.S. government agencies. Nor by the fact that a significant number of components have been effectively cut off by U.S. restrictions on suppliers.

In June, the Pentagon put out a list of 20 companies that it says are owned, controlled by, or affiliated with the Chinese military, government or defense industry. On it are the likes of Hikvision and Huawei Technologies Co. A month earlier, the Commerce Department added two dozen Chinese companies to its entity list that restricts export, re-export, or in-country transfer of items subject to the firms. Last year, Washington put eight Chinese businesses, including Hikvision and Dahua, on a blacklist that accused them of being implicated in human rights violations against Muslim minorities in Xinjiang. Hikvision has denied inappropriate actions.