Shares in two top Chinese surveillance firms plunged Wednesday following reports Washington is considering banning them from buying US components, just as the blacklisting of telecoms giant Huawei fanned their escalating tech war.
The move -- over alleged human rights abuses -- would make it harder for Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology to access the US market and suppliers, Bloomberg News cited people familiar with the matter as saying.
The action, first reported by the New York Times, would also likely exacerbate a worsening row with Beijing after President Donald Trump stopped US firms from selling to Huawei and barred it from the US market. Huawei has been given a 90-day reprieve.
Shares of Hikvision dived 5.54 percent and Dahua tumbled almost six percent in Shenzhen.
Hikvision is the world's largest seller of surveillance equipment, employing 34,000 people worldwide. It has grown quickly as Beijing has expanded surveillance on its population and especially in its restive northwestern Xinjiang region.
The Uighur ethnic minority make up almost half of the region's 23-million-strong population and have been targeted with pervasive surveillance from cameras like those made by Hikvision, among other draconian security measures, following a flare-up in violence in 2014.
Chinese authorities have placed an estimated one million mostly Muslim ethnic minorities including Uighurs in internment camps, which Chinese authorities downplay as "vocational education centres".
Last year US lawmakers wrote to Secretary of State Mike Pompeo and Treasury Secretary Steve Mnuchin calling for sanctions on Chinese officials in charge of the region and on the two surveillance equipment manufacturers supplying equipment, Hikvision and Dahua.
"We have taken note of The New York Times' report this morning and hope our company receives fair and just treatment," said Hikvision board secretary Huang Fanghong.
"Hikvision is a product supplier, we have not done anything improper in Xinjiang, our company has not in the past, does not right now, and will not in the future take any business that has violating human rights as a requirement," Huang said on her WeChat social media account.
Hikvision's controlling shareholder is state-owned China Electronics Technology HIK Group.
As many as five Chinese surveillance hardware makers, including Hikvision and Dahua, could be added to the US Commerce Department entity list, Bloomberg News said.
The Commerce Department action against Huawei threatens to bar the company from using Google's Android software for its smartphones, remove US chips from its handset and telecoms gear, and could slow down the rollout of next generation 5G networks in parts of the world.