The US Department of Defense has added several Chinese tech companies, including Tencent and CATL, to its Section 1260H list of Chinese military companies.
This list serves as a warning to American businesses about the potential risks of engaging with these companies.
While the designation does not immediately impose sanctions, it increases the pressure on the US Treasury Department to take action.
Tencent, the parent company of the popular messaging app WeChat, and CATL, a leading battery maker, have both denied any ties to the Chinese military.
Tencent has called the inclusion on the list a “mistake,” emphasizing that it is not a military supplier. Similarly, CATL rejected the designation, stating it is not involved in any military-related activities.
The US government sees this move as part of its broader strategy to curb China’s growing military power, particularly through technology.
The Pentagon‘s list now includes 134 companies, with critics arguing that the designation undermines international trade principles.
In response, both Tencent and CATL expressed concerns about the negative impact on foreign companies investing in the US. Tencent’s stock dropped by about 7% in Hong Kong, while CATL saw a 4% decline.
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