Chinese Drone Maker DJI Sues Pentagon Over Military Designation

October 27, 2024 TruthUSA

The lawsuit follows several legal challenges brought by Chinese tech industry leaders accused of contributing to the CCP’s military-civil fusion strategy.

Chinese drone giant DJI sued the U.S. Department of Defense (DOD) on Oct. 18 for including the company in the department’s list of Chinese military companies.

DJI, which makes up more than half of the U.S. commercial drone market, said it’s “neither owned nor controlled by the Chinese military.”

The company also said it’s not a contributor to China’s military-civil fusion strategy or its military modernization.

The China-based company argued that the DOD’s designation is “arbitrary and capricious” and asked a district court in Washington to order its deletion from the list.

In 2021, Congress passed legislation requiring the Pentagon to compile a list of Chinese military companies operating in the United States.

The designation alone currently doesn’t carry any direct legal ramifications, but the National Defense Authorization Act for fiscal year 2024 banned the DOD from procuring goods, services, or technology wholly or partially originating from companies on the Chinese military companies list. Businesses may opt to avoid dealing with companies on the list.

There is no formal appeal process for companies seeking removal from the list, but the DOD is required to add and remove companies based on the latest available information.

DJI was added to the list in October 2022. According to the DJI complaint, the Pentagon renewed the designation in January this year despite the company’s 16-month effort seeking removal from the list.

The drone maker said the designation has “caused significant and ongoing harm,” reflected in canceled contracts and “pervasive stigmatization” of the company and its employees.

A defense official told The Epoch Times in an email that the DOD “does not provide information or statements regarding any pending litigation matters.”

DJI’s affordable and powerful products are popular in the United States among hobbyists and in sectors such as agriculture and search and rescue.

The company has also been flagged by some U.S. government agencies—including Homeland Security, the Pentagon, the FBI, and the Treasury—as a national security risk and an alleged contributor to the Chinese communist regime’s human rights abuses in Xinjiang.

DJI has denied all allegations, saying users can control how their data are handled and that the company doesn’t control how customers use its off-the-shelf commercial products.

DJI’s legal challenge against the DOD’s listing follows similar cases, including those brought by Chinese lidar maker Hesai in May and Chinese chipmaking tool manufacturer Advanced Micro-Fabrication Equipment (AMEC) in August.

Hesai, whose customers include robotaxi companies such as General Motors’ Cruise and Amazon’s Zoox, occupies more than a third of the global lidar market and almost three-quarters of the robotic cars market.

AMEC has played a key role in Beijing’s push for supply chain independence in China’s semiconductor industry. Its clients include major chip foundries, such as Semiconductor Manufacturing International Corp.

Last week, the DOD told a district court in Washington that the department delisted Hesai as a Chinese military company but relisted the firm “on a new record based on the latest information available.”

In 2021, Chinese phone maker Xiaomi and big data company Luokung Technology Corp successfully challenged their inclusion on the DOD’s Communist Chinese Military Companies (CCMC) list.

The CCMC list has since been superseded by a wider-ranging Chinese Military-Industrial Complex Companies list, and the Treasury has replaced the DOD as the primary authority to manage the list.

According to the U.S. Department of State, the Chinese communist regime’s military-civil fusion strategy eliminates “barriers between China’s civilian research, and commercial sectors and its military and defense industrial sectors.”

Besides tapping into China’s pool of talent, the department said the CCP is also acquiring foreign technologies via a range of legal and illicit means, including investment, research collaboration, espionage, and theft.

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