US Designates Tencent as a Chinese Military Company, Escalating Tensions
US Designates Tencent as a Chinese Military Company, Escalating Tensions
The United States has added many Chinese technology companies to a list of those it claims to collaborate with China’s military, including gaming and social media behemoth Tencent and battery manufacturer CATL.The list warns American businesses and organizations about the dangers of conducting business with Chinese corporations.
While participation may not result in an instant ban, it may increase pressure on the US Treasury Department to prosecute the corporations.Tencent and CATL have denied any collaboration with the Chinese military, while Beijing has described the decision as an “unreasonable suppression of Chinese companies.”
The Department of Defense’s (DOD) list of Chinese military corporations, technically known as the Section 1260H list, is updated annually and currently comprises 134 companies.It is part of Washington’s strategy to offset Beijing’s efforts to strengthen its military force by using technology from Chinese enterprises, universities, and research programs.In reaction to the recent revelation, Tencent, which controls the messaging service WeChat, stated that its presence on the list was “clearly a mistake.”
“We are neither a military company nor a supplier. “Unlike sanctions or export controls, this listing does not affect our business,” a spokeswoman told the BBC.CATL also deemed the categorization a mistake, stating it “is not engaged in any military-related activities.”
“The US’s practices violate the market competition principles and international economic and trade rules that it has always advocated, and undermine the confidence of foreign companies in investing and operating in the United States,” said Liu Pengyu, a spokesperson for the Chinese embassy in Washington.The Pentagon was pressured by US politicians to include some of the corporations, including CATL, on the list.
This pressure came as the US automaker Ford announced a $2 billion (£1.6 billion) investment to develop a battery plant in Michigan. It has stated that it intends to license technologies from CATL.The announcement comes amid ongoing tensions between the world’s two largest economies.
Meanwhile, President-elect Donald Trump, who has historically criticized Beijing, is expected to return to the White House this month.DJI and Hesai Technologies, makers of drones and lidars, sued the Pentagon last year over their inclusion on the list. They are both still on the revised list.
Tencent shares were trading almost 7% lower in Hong Kong on Tuesday. CATL was down roughly 4%.
umer
