Recent records reveal that Hong Kong-based Baring Private Equity Asia invested in a Chinese artificial intelligence company that had collaborated with an arm of China’s Ministry of Public Security in 2020.
According to The Wire China and our research, the company, Cue Group, had jointly developed surveillance technology with the Video National Engineering Laboratory Zhuhai Innovation Center 视频国家工程实验室（珠海）创新中心 (“Zhuhai Innovation Center”), a government lab run by the Ministry.
The Zhuhai Innovation Center researched video surveillance technology for “comprehensive management of public security, three-dimensional prevention and control for large-scale activities” in the Guangdong – Hong Kong – Macau Greater Bay area, according to website postings by the lab in 2021.
BPEA Real Estate Fund II acquired a partial stake in Cue Group in late 2021 from a KKR entity, which received $275.3 million in connection with the transaction, according to available records in China, Singapore and the U.S.[1]
An example of Cue’s technology is the “CUE Real-time AI Facial and Body Temperature Detector” developed jointly with the Zhuhai Innovation Center, according to company postings from 2020. The technology utilized facial recognition, heat detection and identity matching for pandemic surveillance, tracking 14-day migration of individuals and identifying “companions.”[2]
An April 2020 posting by Cue also described non-pandemic uses of its technology for recognizing “blacklisted persons” and surveillance of “mass gatherings”.[3]
KKR and Cue deny the collaboration, while the Zhuhai lab confirmed it to The Wire China in 2022.
Until February 2022, Cue, registered as Shanghai Cue Information Technology Co., Ltd. 上海开域信息科技有限公司, also had promoted on its website a Cue-branded prototype of an autonomous vehicle “… suitable for public security, fire protection, military, engineering and other fields.”[4]
The First Research Institute of the Ministry of Public Security 公安部第一研究所, which runs the Zhuhai Innovation Center, is an architect of China’s vast surveillance state.
A goal of the Zhuhai Innovation Center is described as “build a three-dimensional ‘Jinwan Model’ for social prevention and control, establish a model for social governance in the Guangdong – Hong Kong – Macao Greater Bay Area,” according to a posting on the lab’s 2021 website.[5]
“The direction of the research at the Zhuhai Innovation Center includes: combine the laboratory’s video intelligence analytics and share the comprehensive application platform on security, conduct research on the safety, stable transmission and application of the installation of moving video surveillance system in the sky, on the ground and under the water; use places such as the key government agencies, large-scale event venues, schools and hospitals as the starting locations, and use personal identification verification equipment, facial recognition equipment, visitor equipment and security equipment as the basic settings, conduct research on the multi-dimensional AI video data collections and analytics, and related equipment, system and platform for people and traffic flow controls.”[6]
Zhuhai Innovation Center’s 2021 website
More information on the Zhuhai Innovation Center is available here, including documentation of Cue CEO Shi Kan’s 施侃 attendance at the lab’s opening ceremony in 2019 as a “strategic partner.”
We could not find information on whether the Zhuhai Innovation Center has played a role in government surveillance in Hong Kong.
The First Research Institute opened the Zhuhai Innovation Center in 2019, the same year that Hong Kong’s China-backed government proposed significant changes to its governing laws, sparking mass protests. When China imposed a National Security Law on Hong Kong in 2020, China’s Ministry of Public Security stated that it would “fully guide and support the Hong Kong police force in curbing violence and chaos, restoring the order, and resolutely safeguarding the stability of Hong Kong”, according to a May 20, 2020 report in the South China Morning Post.[7]
U.S. and Hong Kong investors in BPEA Real Estate Fund II may want to ask Baring questions about its investment in Cue, such as:
- What was the extent of Cue’s collaboration with the Ministry of Public Security, if any?
- Did Baring know Cue had collaborated in 2020 with a Ministry of Public Security lab before investing?
- How did Baring value Cue’s artificial intelligence and surveillance technology in its acquisition?
- Is Cue pursuing artificial intelligence for any public security or military uses?
- Why was this investment appropriate for Baring’s real estate fund?
[1] State Administration for Market Regulation Publicity Form for Simple Cases of Concentration identifies Baring as acquiror of “partial stake” and “joint control” https://www.samr.gov.cn/fldj/ajgs/jzjyajgs/202108/t20210827_334152.html ; Sino Ad Ultimate Pte Ltd 2021 Financial Statement identifies $275.3 million from “investee”; Pitchbook identifies BPEA Real Estate II as the acquirer.
[2] https://cue.group/news/index.html 2020 年04 月02 日, accessed 7/3/2021, post removed following publication of The Surveillance Stake by The Wire China on 2/20/2022.
[3] https://cue.group/news/index.html 2020 年04 月02 日, accessed 7/3/2021, post removed following publication of The Surveillance Stake by The Wire China on 2/20/2022.
[4] Google translation of posting at https://cue.group/#/newsdetails?id=2021_013 . Posting was removed after The Wire China published “The Surveillance Stake” on 2/20/22.
[5] 2020/03/17 http://nelivaiczh.com.cn/plus/view.php?aid=14 accessed 6/1/2021, professional translation.
[6] 2020/03/17 http://nelivaiczh.com.cn/plus/view.php?aid=14 accessed 6/1/2021, professional translation.
[7] https://www.scmp.com/news/hong-kong/law-and-crime/article/3086783/chinas-public-security-ministry-vows-fully-guide-hong 5/20/2020. “’We will conscientiously study and implement the decision of the National People’s Congress on establishing a sound legal system and enforcement mechanism for safeguarding national security in the Hong Kong special administrative region, fully guide and support the Hong Kong police force in curbing violence and chaos, restoring the order, and resolutely safeguarding the stability of Hong Kong,’ the statement read.”