China’s Surveillance Technology: Western Bans, Global Growth
Do you have a home security camera? If so, there’s a good chance it was made by Hikvision or Dahua, two Chinese companies that are dominating the video surveillance business. In 2021, they accounted for more than a third of a global market valued at around $35 billion (€32 billion), according to the latest data from market researcher IDC.
But while Chinese companies like Huawei are increasingly seen as a security threat in European countries, the two surveillance giants have received relatively little attention – even as their equipment surveils airports, train stations and even government buildings around the world. Tens of thousands of Hikvision devices are currently in use in Germany, including in police stations and ministries, according to recent media reports.
Ties with the Communist Party of China
Not everyone is happy about it. The Chinese government owns parts of both companies, and their presence in critical infrastructure has raised concerns about potential espionage. Critics warn that their systems may have built-in backdoors through which Beijing could secretly siphon off sensitive data.
These security breaches are difficult to detect. But Beijing has more obvious access to the data it is potentially interested in:
“If you look at Chinese laws, it’s very clear,” says Antonia Hmaidi, a researcher at the Mercator Institute for China Studies in Berlin. “Every Chinese company has to cooperate with the government and hand over data if requested. This includes data stored in the PRC that was collected abroad.”
Security risks and human rights violations
That’s why many countries are banning Chinese companies. Telecommunications providers Huawei and ZTE may be the most prominent cases, but Western governments have increasingly tried to control Hikvision and Dahua as well. As of late 2022, Australia and the UK have decided to remove the companies’ products from government websites and other sensitive areas. The United States completely banned their sales and imports, citing an “unacceptable risk to national security”.
The two surveillance companies are also facing serious allegations of enabling human rights abuses: Several independent reports have found that Hikvision is providing video technology used in the persecution of China’s Uighur minority.
Dubious path to market dominance
Given such grave concerns, how were the Chinese giants able to secure such a dominant position in the first place?
The answer can be found in their price tags: Hikvision equipment can be up to ten times cheaper than its competitors, according to a 2021 report by digital rights NGO Access Now. A price difference difficult to explain within the rules of competition.
“The concern is that because they are so closely tied to the government, they may not be playing fair in terms of pricing their technology,” says Mike Jude, an IDC market analyst who specializes in video surveillance. This brings a decisive advantage in the poorer countries of the Global South, where Jude sees great potential for the video surveillance market.
Latin America attracted by cheap prices
Take Latin America, where analysts project an annual market growth rate of more than 13% in the coming years. Governments across the region are already expanding their video surveillance capabilities, including tools for biometric recognition. But data protection laws in many countries are insufficient to hold authorities and companies accountable. This poses a threat to people’s privacy, Access Now told DW.
In their efforts to increase public scrutiny, governments in the region often turn to Chinese manufacturers. Along with cheap prices, Hikvision has also been trying to increase its presence by providing free equipment to some countries to test drive, or detect infections during the Covid-19 pandemic. The company is also expanding in less subtle ways, opening an assembly site in Brazil and acquiring Mexico’s largest security systems company, reports industry research group IVPM.
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.