Chinese Majority Owner of Lexmark Blocked By U.S Homeland Security Department
Last week, the Wall Street Journal reported that the U.S. Department of Homeland Security blocked the import of products made by Ninestar, the Chinese owner of Lexmark International. Ninestar and eight China-based subsidiaries are blacklisted because of their “participation in business practices that target members of persecuted groups” including Uyghurs.
Lexmark positions itself as an American company (with a headquarters in Kentucky), exercising independence from the Chinese government. However, as CNBC reported in an analogous situation, “Huawei says it would never hand data to China’s government. Experts say it wouldn’t have a choice.” Dr. Miles Yu of the Hudson Institute further explains their obligation in a 2- minute video here.
But while the federal government may ban such products, state and local governments continue the purchases.
China Tech Threat (CTT) recently released a new 50-state report, States of Denial vs States of Momentum, which found that 46 states have made purchases from Lexmark and Lenovo – both PRC-owned companies – with recent spending totaling over $285 million. This dangerous technology has been deployed in departments charged with protecting sensitive data including military-connected agencies, state police forces, departments with election oversight, and more than a dozen state legislatures.
Lexmark and Lenovo are restricted by U.S. military and intelligence agencies due to their connection to the Chinese government and military. (See the DOD Inspector General’s report on both companies.) Frighteningly, China’s 2017 National Intelligence Law requires companies either domiciled in China or substantially owned by China-based entities to do what the Chinese Communist Party commands.
Yet, states continue to purchase their products either directly or through “qualified resellers” that further mask their true identity. (For a complete list of resellers, see pages 22-23.)
Read more about the problem and solutions at www.StatesStopChinaTech.com.
This statement is not well researched. If you consider IDC's report of the situation (https://www.idc.com/getdoc.jsp?containerId=lcUS50983523), you find that while Ninestar is a majority shareholder, they are not in control of Lexmark and Lexmark is not affected by this ban. Xerox was also affected by this, but to a small degree as Lexmark was.
Even the Wall Street Journal article that broke the original story admits that Ninestar has "no operational control." (https://www.wsj.com/articles/u-s-puts-chinese-company-with-kentucky-ties-on-forced-labor-ban-list-ce2e8d00)
The DoD Inspector General report referenced in this article has to do with COTS device, while every company, including Lexmark, has specially built TAA-compliant devices that would not fall under that report. Lexmark still has a strong footprint in the DoD because there they take their security seriously and their devices comply with all regulations.
I can only assume that either China Tech Threat is not doing proper journalistic research, or has a particular axe to grind with Lexmark because they are finding problems where none exist.