Shares in Chinese surveillance company Hikvision plunged on Wednesday, following a report that the Trump administration is mulling slapping it with a US export ban.
Hikvision stock plummeted the daily limit of 10% during early morning trading in Shenzhen. It recovered some of those losses to close about 6% lower.
The drop came after the New York Times reported that the United States is considering placing the Chinese surveillance technology firm on a trade blacklist, citing people familiar with the matter.
The move would be Washington’s latest attempt to curb Beijing’s tech ambitions, and a further escalation of the US-China trade war.
“Hikvision takes these concerns very seriously and has engaged with the US government regarding all of this since last October,” a company spokesperson said in a statement on Wednesday.
“Separately, Hikvision takes cybersecurity very seriously as a company and follows all applicable laws and regulations in the markets we operate,” the spokesperson said.
The US Department of Commerce did not respond to a request for comment outside regular business hours.
Hikvision manufactures surveillance cameras and security products powered by artificial intelligence. The company says its products can track people using facial recognition or physical characteristics such as gait, count the number of people who visit specific areas, and detect “unusual behavior like a violent action.”
Hikvision has faced international criticism for its surveillance deals in Tibet and Xinjiang, with US lawmakers last year urging sanctions against the company and accusing it of helping China create a “high-tech police state.”
The Chinese government has stepped up surveillance in the country’s western Xinjiang province as part of a crackdown on the region’s Uyghur Muslim population. Its presence in Tibet, an internationally recognized autonomous region, is also disputed by the Tibetan population and has boiled over into large scale riots in the past.
The reported US move on Hikvision would be similar to the restrictions placed on Chinese tech giant Huawei last week. The US Department of Commerce would place Hikvision on a list of foreign firms deemed to undermine American national security or foreign policy interests. Listed companies are barred from receiving components and software unless the trade is licensed.
Brokerage firm Jefferies said in a note Wednesday that a US ban would not hit Hikvision as hard as it did Huawei. The company can buy critical parts for its artificial intelligence products from local distributors, said Jefferies analyst Rex Wu.
In a note last month, Wu said he expects Hikvision’s annual revenue to be boosted by “China’s central government procurement platform,” noting that “Xinjiang’s public security budget for 2019 is still rising” compared to a year earlier.