Category Archives: china

DJI Sues The U.S. Department of Defense For Labeling It a “Chinese Military Company”

china, drone

DJI, the world’s largest drone company, is suing to avoid being seen as a tool of the Chinese government, The Verge reported.

On Friday, it sued the US Department of Defense to delete its name from a list of “Chinese Military Companies,” claiming it has no such relationship to Chinese authorities and has suffered unfairly as a result of that designation.

Since DJI was added to that list in 2022, the company claims, it has “lost business deals, been stigmatized as a national security threat, and been banned from contracting with multiple federal government agencies,” and are “repeatedly harassed and insulted in public places.”

It also alleges that the DoD would not offer the company any explanation for its designation as a “Chinese Military Company” until DJI threatened a lawsuit this September and claims that when the DoD finally offered up its reasoning, it was filled with errors.

Reuters reported China-based DJI sued the U.S. Defense Department on Friday, for adding the drone maker to a list of companies allegedly working with Beijing’s military, saying the designation is wrong and has caused the company significant financial harm.

DJI, the world’s largest drone manufacturer that sells more than half of all U.S. commercial drones, asked a U.S. District Judge in Washington to order its removal from the Pentagon list designating it as a “Chinese military company,”saying it “is neither owned nor controlled by the Chinese military.”

Being placed on the list represents a warning to U.S. entities and companies about the national security risks of conducting business with them.

DJI’s lawsuit says because of the Defense Department’s “unlawful and misguided decision” it has “lost business deals, been stigmatized as a national security threat, and been banned from contracting with multiple federal government agencies.”

The company added “U.S. and international customers have terminated existing contracts with DJI and refuse to enter into new ones.”

Politico reported Chinese drone company Shenzhen DJI Innovation Technology Co., Ltd., commonly known as DJI, is suing the U.S. Defense Department in bid to overturn the department’s designation of the firm as a “military company.”

The lawsuit alleges that the listing is unfair because “DJI is neither owned nor controlled by the Chinese military and … sells only ‘consumer and commercial’ — not military — drones.”

DJI names Defense Secretary Lloyd Austin and Deputy Defense Secretary for Industrial Base Policy Laura Taylor-Kale and co-defendants in the lawsuit filed by U.S. law firm Paul Weiss in the Washington, D.C., District Court on Friday. The company alleges that the Pentagon has refused “to provide its rationale for DJI’s designation” and ignored requests to meet with DJI representatives.

In my opinion, this is not the first time that DJI drones have been used in the United States. It is unclear to me how long it will take to sort out this lawsuit.

US Proposes Banning Chinese Software And Components In Vehicles

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The U.S. Commerce Department on Monday proposed banning Chinese software and hardware for vehicles with a built-in internet connection, a move that would in effect ban Chinese vehicles from the US market, Financial Times reported.

The rule follows concerns from the Biden administration about Chinese companies collecting data on American drivers and infrastructure as well as the potential for foreign adversaries to remotely manipulate connected cars on US roads.

It is the latest step in a wider US effort to crack down on Chinese vehicles, software and components. The US already sharply raised tariffs on Chinese imports this year, including a 100 per cent levy on Chinese electric vehicles.

The measure would allow some exceptions to the ban if companies could show they were taking mitigating measures, such as auditing or site checking. But officials said the rule would essentially ban Chinese vehicles.

The White House posted: FACT SHEET: Protecting America from Connected Vehicle Technology from Countries of Concern.

Chinese automakers are seeking to dominate connected vehicle technologies in the United States and globally, posing new threats to our national security, including through our supply chains. The Biden-Harris Administration is committed to ensuring that our automotive supply chains are resilient and secure from foreign threats.

Today, President Biden is announcing strong action to protect America from the national security risks associated with connected vehicle technologies from countries of concern. The Department of Commerce is issuing a notice of proposed rulemaking (NPRM) that would, if finalized as proposed, prohibit the sale or import of connected vehicles that incorporate certain technology and the import of particular components themselves from countries of concern, specifically the People’s Republic of China (PRC) and Russia.

The announcement is the next step in a process President Biden announced in February, 2024. This NPRM incorporates public feedback submitted in response to the Department’s advance notice of proposed rulemaking (ANPRM) issued on March 1, 2024, which sought public comment on the national security technologies used in connected vehicles…

Reuters reported: The U.S. Commerce Department on Monday proposed prohibiting key Chinese software and hardware in connected vehicles on American roads due to national security concerns, a move that would effectively bar Chinese cars and trucks from the U.S. market.

The planned regulations, first reported by Reuters, would also force American and other major automakers in years ahead to remove key Chinese software and hardware from vehicles in the United States.

President Joe Biden’s administration has raised concerns about data collection by connected Chinese vehicles on U.S. drivers and infrastructure and potential foreign manipulation of vehicles connected to the internet and navigation systems. In February, the White House ordered an investigation.

In my opinion, it looks like the Biden-Harris Administration is working on removing Chinese software and hardware from vehicles in the U.S. Doing so should make the roads much safer.

US Revokes Licenses For Supply Of Chips To China’s Huawei

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The Biden administration has revoked export licenses that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company, Financial Times reported.

The move by the US Department of Commerce affects the supply of chips for Huawei’s laptop computers and mobile phones, according to people familiar with the situation.

The commerce department confirmed to the Financial Times that it had “revoked certain licenses for exports to Huawei” but did not name which US companies would be affected.

“We continuously assess how our controls can best protect our national security and foreign policy interests, taking into consideration a constantly changing threat environment and technological landscape,” said a spokesperson for the department. “As part of this process, as we have done in the past, we sometimes revoke export licenses.”

One person familiar with the situation said the commerce department had notified the companies that would be affected, but did not provide details.

Washington already has tough restrictions on the sale of US technology to Huawei, but Republican lawmakers have urged President Joe Biden to take even tougher action against the Chinese group, which national security officials say helps Beijing engage in cyber espionage around the world. Huawei has denied the claims.

CNBC reported Huawei was placed on a U.S. trade blacklist in 2019, which banned U.S. firms from selling technology – including 5G chips – to the Chinese tech giant over national security concerns. In 2020, the U.S. tightened chip restrictions on Huawei, requiring foreign manufacturers using American chipmaking equipment to obtain a license before they can sell semiconductors to Huawei.

Huawei’s consumer business, which includes smartphones and laptops, is seeing a resurgence after launching the Mate 60 Pro smartphone in August.

A TechInsights analysis of Huawei’s Mate 60 Pro smartphone revealed an advanced chip made by China’s top chip maker, SMIC. The smartphone is also said to be equipped with 5G connectivity – a feature which U.S. sanctions had sought to block.

U.S. firms Qualcomm and Intel, are two of the companies that supply chips to Huawei. Qualcomm in an SEC filing earlier this moth said it expects operations to be “further impacted” from its customers, such as Huawei, developing their own chips. 

ArsTechnica reported the U.S. crackdown on exports to Huawei now includes even stronger restrictions than the company has already faced. The Financial Times reported that Intel and Qualcomm have had their Huawei export licenses revoked, so Huawei will no longer be able to buy chips from either company.

The export ban has been around since 2020 and means that any company wishing to ship parts to Huawei must get approval from the government on a case-by-case basis. Sometimes these come with restrictions, like Qualcomm’s license, which allowed it to ship smartphone chips to Huawei, but not “5G” chips. 

That led to Qualcomm creating special 4G-only versions of its 5G chips for Huawei, and the company ended up with 4G-only Snapdragon 888 phones in 2021.

In my opinion, this is not the first time the U.S. government placed restrictions on companies who wanted to send 4G or 5G chips to China. It seems like Huawei “keeps turning up like a bad penny”. 

Chinese Industrial Espionage and IP Theft

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espionageEveryone with half a brain realizes that the efforts behind Chinese industrial espionage and IP theft have helped fuel their economoy. They are masters of stealing and duplicating tech that they did not build, design and or create.

One only has to go to any trade show and watch vendors throw covers over their newest products when the Chinese spies enter their booths. These teams operate in the open and are pretty slick they will have one guy taking 100’s of pictures of the new product, one flipping through menus, one or two taking notes and one guy scouting out the next product.

Experienced vendors know who these teams are, and what they are doing and are often helpless to stop the spies from examining with great detail the latest and greatest products from a targeted company. I do not blame companies for trying to hide prototypes or limit exposure to products not yet on the open marketplace from this type of espionage.

The administration is hammering China with new tariffs which contrary to many thoughts on this I think is a good thing. I would like to see some additional penalties be put in place for much of the outright espionage and IP theft that happens as well.

One only needs to go on Alibaba to see the knock off’s. Equally depressing is that these knock off’s end up getting licensed and branded to be put on the market around the world under murky distributor brands. Like I said the Chinese are great at copying and duplicating. It is to bad that they could not spend an equal amount of energy in creating their own products.

But why spend time creating when you can just steal and copy.
Photo by Bernard Hermant on Unsplash