Chinese companies on blacklist rebrand as American to avoid crackdown

In December, a new company registered in Michigan called American Lidar, with plans to be located near the big three U.S. automakers. However, the company behind American Lidar, Hesai Group, a China-based lidar maker, has raised concerns as the U.S. has labeled it a security risk. This move follows a trend where companies facing regulatory or reputational issues set up subsidiaries with different names.

Chinese companies are rebranding and creating U.S.-domiciled businesses to navigate Washington’s anti-China policies. This strategy allows them to continue business dealings in the U.S. despite restrictions on Chinese companies. The Biden administration’s expansion of government entity lists has forced Chinese firms to adapt their business strategies.

Hesai, the company behind American Lidar, faced backlash after being added to the Defense Department’s list of Chinese military entities operating in the U.S. This move led to a 30% stock drop and a pause in plans for the American Lidar facility. Hesai has filed a lawsuit against the Defense Department to be removed from the list.

The rebranding and establishment of subsidiaries by Chinese companies have legal implications but also create challenges for regulators in identifying the true ownership of these businesses. The ongoing tensions between the U.S. and Chinese companies highlight the complexities of global business operations and the impact of geopolitical factors on corporate strategies.