Asia, Business & trade, New in Lobbying, US-China tensions

Chinese tech firms go on 2020 lobbying spree with little to show for it

Chinese technology companies have finally woken up to the threat from Washington.

It may be too late for many of them.

A Foreign Lobby Report analysis (see chart below) of lobbying filings reveals that at least 15 Chinese technology companies spent almost $16 million in lobbying and public relations in the first three quarters of 2020. That’s up from around $15.3 million for all of 2019, which itself dwarfed 2018.

Six of those companies only started lobbying this year. Together those six have hired nine lobbying firms and three former members of Congress, while spending more than $1.1 million on influence operations so far this year.

The spending surge has largely failed to rein in the Donald Trump administration or silence bipartisan concerns on Capitol Hill about Chinese threats to US intellectual property and national security. Just last week the Department of Commerce blacklisted China’s leading semiconductor company and the world’s biggest drone-maker, restricting US technology exports to the companies.

China watchers don’t expect the dynamic to change much under the incoming Joe Biden administration.

“Chinese companies operating in or buying products from the US are under unprecedented scrutiny, there is bipartisan unhappiness with China, and the American public is increasingly critical of China’s trade and foreign policy,” US-China Business Council spokesman Doug Barry said in an emailed statement. “With respect to Congress, there are more than 400 pieces of China-related legislation coursing through the body, many of which are intended to sanction China. Although most will not become law, some will, further straining the relationship.”

Barry said that a “different tone in the bilateral relationship” is needed for business ties to improve, with a couple million US jobs at stake.


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The latest lobbying push continues a trend that started in 2018 as the Trump administration turned the screws on telecommunications giants Huawei and ZTE. After relying on US businesses to advocate for the US-China relationship for years, Chinese technology companies began to invest heavily in their own lobbying operations.

The efforts have had mixed results. While ZTE was able to reverse a ban on its US operations in July 2018 after a massive lobbying campaign, Huawei has instead opted for a $3.5 million public relations push as it fights US restrictions in the courts of law and public opinion.

Despite the warning signs and the bipartisan signals from Washington, lobbying records show several Chinese companies have still been caught flat-footed by recent US actions.

These include the newly blacklisted Semiconductor Manufacturing International Corporation (SMIC), which hired its first lobbying firm in mid-September. That month the US Commerce Department began warning US companies that exports to the giant chipmaker posed an “unacceptable risk of diversion to a military end use.”

Other companies that only started lobbying in 2020 include technology conglomerate Tencent, which owns the widely popular WeChat app that President Trump targeted in an Aug. 6 executive order; China’s leading cloud computing company the Inspur Group, which the Department of Defense designated as having links to the Chinese military in June; image sensor company Omnivision; smartphone maker OnePlus; and videogame company Riot Games, which is owned by Tencent.

Several former US lawmakers are working on the new Chinese contracts. Former House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) is lobbying for Tencent and Omnivision via Brownstein Hyatt Farber Schreck. Former Rep. Peter Roskam (R-Ill.) is lobbying for Inspur via Sidley Austin. And former Rep. Jon Christensen (R-Neb.) is helping OnePlus with visa applications via Appo-G.

Meanwhile former Sen. David Vitter (R-La.) has been lobbying for the US affiliate of Hikvision via Mercury Public Affairs since 2018.

Company
Current lobbying issues
Influence firms
2020 spending
(Q1 – Q3)
2019 spending
(excluding subcontractors)
ByteDance

(Entertainment)
Parent company of TikTok

Targeted by President
Donald Trump
Executive Order
of Aug. 6, 2020
ByteDance
(in-house lobbying)

Covington & Burling

Monument Advocacy

K & L Gates

Mehlman Castagnetti

American Continental Group
$1.53 million


terminated

$330,000

$120,000

$300,000

$260,000
$270,000


$140,000

$100,000

$40,000

N/A

N/A
DJI Technology Inc.

(Drones)
Accused of human rights
abuses in Xinjiang

Added to Commerce Department
“entity list” restricting US
technology exports
to the company on Dec. 18, 2020
DJI Technology Inc.
(in-house lobbying)

K & L Gates

BGR Gov’t Affairs

Akin Gump

Cassidy & Associates

CLS Strategies
$1 million


$190,000

terminated

$240,000

$90,000

$10,000
$680,000


$240,000

$80,000

$40,000

N/A

N/A
Fujian Jinhua

(Semi-conductors)
Accused of intellectual
property theft

Added to Commerce Department
entity list in October 2018
Steptoe & Johnson

Brownstein Hyatt Farber Schreck

Jim Handy

Blueprint Communications
$210,000

$360,000

Unknown

$17,500/month
$240,000

$670,000

Unknown

N/A
Hikvision

(Video
Surveillance)
Accused of human rights
abuses in Xinjiang

Added to Commerce Department
entity list in October 2019
Sidley Austin

Glover Park Group

Mercury Public Affairs

Burson-Marsteller (public relations)
$1.5 million

terminated

$767,000 (Jan. – June)

$1.04 million (Jan. – June)

$640,000

$240,000

$1.4 million

$820,000
Huawei Technologies

(Tele-
communications)
Accused of being a threat
to US national security

Added to Commerce Department
entity list in May 2019

Designated a national security threat
by the Federal Communications
Commission in June 2020
Huawei Technologies USA
(in-house lobbying)

Jones Day

Racepoint Global (public relations)

Steptoe & Johnson

Sidley Austin

Squire Patton Boggs

Pivot Integrated Communications


Ruder Finn
(public relations)
$450,000


$0*

$2.4 million

$160,000

$0*

$380,000

$964,000
(terminated)

Unknown**
$2.99 million


$60,000

$1.05 million

$210,000

$0*

$230,000

$282,000


N/A
iFLYTEK

(Voice recognition)
Accused of human rights abuses
in Xinjiang

Added to Commerce Department
entity list in May 2019
Chartwell Strategy Group


Pillsbury Winthrop Shaw Pittman
$300,000


$753,000 (Feb-July)
$150,000


$865,000
(through Jan. 2020)
Inspur Group

(Cloud computing)
Added to list of Department
of Defense list of “Communist
Chinese military companies”
in June 2020
Sidley Austin
Unknown
No lobbying
Lenovo

(Computers)
Dutko Worldwide
$100,000
$260,000
Lexmark

(Printers)
Richard Goodstein

Venn Strategies
$120,000

$120,000
$160,000

$0*
Omnivision
Technologies


(Image sensors)
Approved to sell image
sensors to Huawei in Oct. 2020
Brownstein Hyatt Farber Schreck
Unknown
No lobbying
OnePlus

(Smartphones)
APPO-G
Unknown
No lobbying
Riot Games

(Video games)
Owned by Tencent (see below)
Platinum Advisors
$150,000
No lobbying
Semiconductor
Manufacturing
Int’l Corp (SMIC)


(Semi-conductors)
Accused of ties to entities
of concern in the Chinese
military industrial complex

Added to Commerce
Department “entity list” restricting
US technology exports to the
company on Dec. 18, 2020
Akin Gump


Capitol Counsel (via Akin Gump)
$50,000

Unknown
No lobbying
Tencent

(Tech conglomerate)
Parent company of WeChat app

Targeted by President Donald
Trump’s executive order of
Aug. 6, 2020
Tencent Holdings (in-house lobbying)

Paul Weiss Rifkind Wharton & Garrison

Toby Myerson

Brownstein Hyatt Farber Schreck
$500,000


$210,000


$150,000

$130,000
No lobbying
ZTE Corporation

(Tele-
communications)
Designated a national security
threat by the Federal
Communications Commission in June 2020
ZTE USA (in-house lobbying)

APPO-G

Hogan Lovells

Akin Gump
$30,000

$50,000

terminated

$850,000
$120,000

$150,000

$2.94 million

$80,000
* $5K or less per quarter
** Huawei signed a year-long, $1.45 million contract with Ruder Finn at the end of October

Source: Lobbying Disclosure Act (Congress) / Foreign Agents Registration Act (Department of Justice)

Update: This post was updated on Jan. 12, 2021 to note that former Sen. David Vitter (R-La.) is a registered foreign agent for Hikvision (US).

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