China US Photo:VCG

The US Department of Defense is reportedly planning to remove Chinese tech firm Hesai Technology from its blacklist of Chinese "military-affiliated companies," which would mark a reversal for the Pentagon. Observers said on Tuesday that this indicates the irreplaceability of cutting-edge Chinese products such as laser sensors for electric vehicles (EVs).

Observers said that Washington's overstretching of the national security concept and its arbitrary and capricious crackdown on Chinese companies will harm normal economic and trade cooperation between China and the US, while stressing that the US moves of unilateral sanctions on Chinese firms will backfire and undermine the interests of US companies and investors.

The Pentagon has decided to remove Hesai from its blacklist of Chinese military-affiliated companies after judging that the laser sensor maker did not meet the legal criteria for inclusion, the Financial Times reported on Tuesday, citing sources familiar with the move.

Hesai had no comment on the US Department of Defense's reported move when reached by the Global Times on Tuesday, but maintained that its inclusion on the 1260H list had been a mistake.

"Our products are strictly for commercial and civilian use, and we have no connection to any military bodies. We are not a vendor to any military bodies," the company said.

The Pentagon added Hesai to a blacklist in January, along with more than a dozen other Chinese companies. In May, Hesai filed a lawsuit against the US Department of Defense for including it on the blacklist, saying that the move had caused it to suffer reputational injury, a significant drop in stock prices and business losses.

"Hesai's active legal actions to fight back against the US government agency's unreasonable move apparently produced effects. More importantly, the latest development shows that the US market has demand for the company's products, which remain irreplaceable for US companies and consumers," Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Tuesday that the embarrassing reversal of the US Department of Defense's decision underscores how arbitrary and high-handed the US government is in its containment of China and Chinese tech firms.

In 2021, the Pentagon removed Chinese smartphone maker Xiaomi Corp from a US government blacklist, after Xiaomi filed a lawsuit against the US government, calling the blacklisting "unconstitutional."

Lü said the US may have to remove more and more Chinese companies from its blacklist, since China's quality products and cutting-edge technologies such as EV batteries and unmanned drones are indispensable for the US market.

Recently, the Biden administration announced that the implementation of increased tariffs on Chinese imports, which was to have taken effect on August 1, would be postponed for at least two weeks, underscoring concerns among US businesses about the impact of the tariffs on specific industries or products.

"It is hoped that the US will correct its mistake and provide a just, fair and non-discriminatory business environment for Chinese companies," Lü said. He called for Chinese companies to resort to legal measures to safeguard their legitimate rights and interests while sharpening their tech capability to strengthen their international discourse power.

Li urged the US to stop overstretching the concept of national security and creating all kinds of discriminatory lists, as tougher bans put the interests of both Chinese businesses and US investors at stake.

Removing sanctions and restrictions and stopping the suppression of Chinese companies will benefit China, the US and the world as a whole, according to Li.