American by Name, Chinese by Game: Tech Firms Sidestep U.S. Sanctions

There is a growing trend of Chinese companies blacklisted by the U.S. government rebranding themselves with English names to pose as American companies.

According to the Wall Street Journal (WSJ) on the 29th, Hesai, a Chinese autonomous vehicle LiDAR sensor technology startup designated as a blacklisted company by the U.S. government, has changed its U.S. company name to American LiDAR.

LiDAR, used for vehicles to recognize their surroundings, has the potential to collect sensitive information within the U.S. Consequently, Hesai was designated as a national security concern by the U.S. Department of Defense, further leading to prohibitions on U.S. military personnel from purchasing Hesai products. The company has filed a lawsuit against the U.S. Department of Defense, arguing that it should be removed from the blacklist as it is not under the control of the Chinese government.

Similarly, TikTok made efforts to erase the image of its Chinese parent company, ByteDance, by establishing a U.S. corporation. BGI Genomics, a subsidiary of the Chinese biotech company Beijing Genomics Institute (BGI) Group, changed the name of its subsidiary, BGI Americas, in Massachusetts to Inomics to avoid U.S. sanctions. BGI Genomics was listed as a Chinese military-affiliated company by the U.S. Department of Defense in 2022.

DJI, a Chinese company that dominates the global drone market, has also entered the local market by securing technology licenses with U.S. startups to circumvent sanctions. Huawei, the world’s largest telecommunications equipment company, previously separated its U.S. research and development (R&D) branch, Futurewei, after being registered as a company restricted from trading in the U.S. in 2019.

The WSJ explains that it is not illegal for Chinese companies to change their brands to American names or establish subsidiaries in the U.S. under new names. However, such actions by Chinese companies could obscure the companies’ backgrounds and prevent the proper enforcement of U.S. laws. Derek Scissors, a researcher at the American Enterprise Institute (AEI), emphasized, “To increase the effectiveness of sanctions, the U.S. government should target technology sectors, not individual companies.”