The United States has included multiple Chinese technology firms, such as the prominent gaming and social media entity Tencent and the battery manufacturer CATL, on a roster of companies it claims to collaborate with the Chinese military.
The list is a cautionary measure for American companies and organizations regarding the potential dangers of engaging in business with Chinese entities.
Including these firms may not result in an immediate ban, yet it could intensify pressure on the US Treasury Department to impose sanctions.
Tencent and CATL have refuted claims of ties to the Chinese military, as Beijing characterized the decision as an “unreasonable suppression of Chinese companies.”
The Department of Defence has released its annual update of the Section 1260H list, which identifies Chinese military companies. The latest iteration of the list now comprises 134 firms.
Washington is actively pursuing strategies to counter what it perceives as Beijing’s attempts to bolster its military capabilities through technology sourced from Chinese companies, academic institutions, and research initiatives.
Tencent, the parent company of the messaging app WeChat, has responded to the recent announcement regarding its inclusion on the list, stating that it was “clearly a mistake.”
Our organization does not operate as a military company or supplier. A spokesperson for the company stated to the BBC, “This listing has no impact on our business, unlike sanctions or export controls.”
CATL has characterized the designation as an error, asserting that it “is not engaged in any military-related activities.”
“The practices of the United States are in violation of the principles of market competition and the international economic and trade rules that it has consistently championed, thereby eroding the confidence of foreign companies in their ability to invest and operate within the country,” stated Liu Pengyu, a spokesperson for the Chinese embassy in Washington.
US lawmakers have pressured the Pentagon to include several firms, notably CATL, on the list.
The announcement from US automotive powerhouse Ford regarding a $2 billion (£1.6 billion) investment to establish a battery plant in Michigan has intensified the pressure on the industry. The company has announced its intention to license technology from CATL.
Ford has yet to respond to a comment request from the BBC.
The announcement arrives amid ongoing tensions between the globe’s two largest economies.
In the coming weeks, President-elect Donald Trump, known for his firm position on China, is set to make his return to the White House.
Last year, the Pentagon faced a lawsuit from drone manufacturer DJI and Lidar producer Hesai Technologies regarding their placement on a specific list. Both individuals continue to be featured on the revised list.
Tencent’s stock experienced a decline of approximately 7% in Hong Kong trading on Tuesday. CATL experienced a decrease of roughly 4%.
