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Chinese dronemaker DJI plays ‘textbook’ game in Washington

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Via Financial Times

As the US government ramps up its scrutiny of Chinese technology companies, one in particular is coming under the spotlight: DJI, the world’s biggest dronemaker.

But DJI appears to have spotted the danger early and has spent years on what its rivals describe as a “textbook” example of lobbying in Washington, attaching itself closely to parts of the government and responding quickly to political concerns.

Its approach contrasts with other companies such as Huawei or ByteDance, the owner of the viral video app TikTok, which are struggling to respond as the US hits out at Chinese tech.

Huawei, for example, has said it is unable to secure a single meeting in Washington as its executives attempt to push back against US sanctions.

The Trump administration is now split over whether or not to ban DJI’s drones outright or to take a softer approach. “There are people within the administration who want to hit DJI with a hammer right now,” said one senior government official. “But there are plenty of others who are warning that if you do, there are not many alternatives.”

One Washington-based industry lobbyist said: “DJI has played this perfectly. They have got themselves on to key committees, they have made sure they have champions within government.”

DJI does not release sales figures, but industry estimates suggest that it has more than 70 per cent of the US market, which will reach roughly 7m drones by the end of next year.

Its products, which are equipped with high-resolution cameras, are sold as recreational items in high-street shops. But they are also widely used by government agencies to fight fires, monitor wildlife and conduct search-and-rescue operations.

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The company estimates that “thousands” of its drones are being used for such work.

Now it is lobbying to retain the ability to deploy its drone identification system, known as Aeroscope, which monitors low-altitude airspace against rogue drones.

Last week, the US interior department temporarily grounded its entire fleet of 810 drones, including 121 made by DJI, while it assessed whether drones made partly in China pose a threat to national security.

The move is the latest sign of a growing concern within the White House and in Congress that the data collected by hundreds of thousands of Chinese drones across the US could be fed back to Beijing and used to spy on American citizens.

But Mario Rebello, DJI’s North America country manager, said the company has been working to develop a new model of drone designed specifically for the US government which gives users greater control over their own data. “We have engaged closely with the Department of the Interior, and have become more embedded with state agencies,” he said.

Speaking before the fleet was grounded, Mark Bathrick, head of the interior department’s Office of Aviation Services, said: “Pretty much everything we do to manage people’s land, we can do with the help of drones. This includes DJI, which we feel is reasonably secure. Using them takes one-seventh the time and one-tenth of the cost of using manpower.”

DJI has also fostered close links within the Federal Aviation Administration, which is in charge of writing the rules that govern drone use across the US. Brendan Schulman, DJI’s vice-president of policy and legal affairs, serves on the FAA’s Drone Advisory Committee — the only employee of a non-American company to do so.

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The company has hired Washington figures such as Mark Aitken, a former industry lobbyist, and David Hansell, a former National Security Council official.

It has also set up teams of consultants who can be dispatched to areas around the country should state-level agencies need help operating their DJI drones.

“If a fire department has a problem with its DJI drones, we can send a team up there to work with the operators themselves,” said Mr Rebello. “Sometimes it is a couple of hours, sometimes it is a couple of days, but they will be there until the problem is resolved.”

Even at the defence department, DJI drones were in common use before the army issued a directive banning staff from using them. Congress is now debating a bill that would ban the Pentagon from buying or using any Chinese-made drone.

In its fight against such a ban, the company is being helped by the drone industry’s main industry group, the US-based Association of Unmanned Vehicle Systems International, of which DJI is a member.

In September the AUVSI hosted an event in Washington which included speeches from two members of the House of Representatives’ transport committee. At the event, association members were told to warn politicians that a ban on DJI could harm the economy and prevent the defence department from using the company’s drone-tracking technology, according to a document seen by the Financial Times.

A large part of DJI’s success has been the dominance of its technology. A host of western companies, including the US’s 3D Robotics and France’s Parrot, have tried to take on the Chinese company in the consumer market, but were defeated, in part by the costs of manufacturing.

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But its lobbying efforts have been an important part of making sure it does not get shut out of one of its most important markets — though that success might yet be shortlived.

Senators are considering a bill that would see all parts of the federal government banned from buying its products, and the Pentagon’s Defense Innovation Unit is looking at ways to support US rivals.

People close to DJI admit they are concerned Donald Trump could at any point issue a presidential order to sanction the company, as he did with Huawei. But the company’s rivals say the fact that he has not yet done so is testimony to how successful DJI has been in fostering allies within government.

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