US Designates Tencent and CATL as Chinese Military Companies Amid Rising Tensions

The US has officially added several Chinese technology companies, including Tencent and CATL, to a list of firms it claims have ties to China’s military. This designation serves as a warning to American companies, signaling potential risks associated with doing business with these entities.

Although being listed does not immediately lead to a ban, it intensifies scrutiny from the US Treasury Department, which could impose sanctions on the companies. Tencent, the parent company of the popular messaging app WeChat, and CATL, a major battery maker, have both strongly denied any involvement with the Chinese military. Tencent called its inclusion a mistake, emphasizing that the listing does not affect its operations, while CATL made similar claims, arguing that it is not involved in any military-related activities.

The Department of Defense’s list, known as the Section 1260H list, now includes 134 firms. This list is part of the broader US strategy to counter China’s military expansion by restricting access to technology that could be used to enhance military power. US lawmakers, facing pressure from domestic industries such as Ford, have advocated for the inclusion of certain companies, including CATL, on the list. Ford has invested $2 billion in a battery plant in Michigan, planning to license technology from CATL, which has raised concerns.

This move adds tension to the already strained relations between the US and China. Additionally, the inclusion of companies like DJI and Hesai Technologies—who have sued the Pentagon—highlights ongoing legal battles surrounding the list.

Following the announcement, Tencent’s stock dropped by 7%, while CATL saw a 4% decrease.

The US decision raises important questions about the role of technology companies in military affairs and the growing economic and political tensions between the US and China.