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US adds Tencent, CATL to list of Chinese firms allegedly aiding Beijing’s military By Reuters

By Michael Martina, David Shepardson and Karen Freifeld

WASHINGTON/NEW YORK (Reuters) – The U.S. Defense Department said on Monday it had added Chinese tech giants including sports and telecommunications leader Tencent Holdings (OTC:) and battery maker CATL to a list of firms it says are working with China’s military.

The list also includes chip maker Changxin Memory Technologies, Quectel Wireless and drone maker Autel Robotics, according to a document published on Monday.

The annually updated list of Chinese military companies, officially approved under US law as the “Section 1260H List,” has named 134 companies, according to a notice posted to the Federal Register.

Tencent’s Hong Kong-listed shares fell as much as 7% in early trading, while US-traded shares of the company, which is also the parent of Chinese instant messaging app WeChat, fell 8% in over-the-counter trading. counter. .

Tencent said in a statement that its listing was “clearly a mistake.” It added: “We are not a military company or supplier. Unlike sanctions or export controls, this list has no impact on our business.”

CATL, the world’s largest maker of electric vehicle batteries whose Shenzhen-listed shares fell more than 5%, also called the talk a mistake, saying it was “not involved in any military-related activities.”

A Quectel spokesperson said the company “does not work with the military of any country and will ask the Pentagon to reconsider its designation, which was clearly made in error.” Quectel shares were down about 7%.

Other companies and China’s embassy in Washington did not immediately respond to requests for comment.

IMPACT ON COMPANIES

The revised list is one of many steps Washington has taken in recent years to highlight and restrict Chinese companies it says pose a security risk, affecting strained relations between the world’s two largest economies.

Jefferies said in a research paper that the purpose of the list of China’s military companies (CMC) was to present a view of the Ministry of Defense that could serve as a reference for other government departments.

“The worst effect on CMC companies is the ban on investment in the US, but it’s all on Trump and his team.”

Craig Singleton, a China expert at the Foundation for Defense of Democracies, said the additions show it is “reckless” for American firms to do business with dozens of Chinese companies.

“The US is no longer just protecting a handful of technologies,” he said. “The garden of critical technologies is growing, and the fences that protect them are being strengthened. Today’s list makes it clear that these are not just commercial companies. They are a vital force in the modernization of China’s military, directly fueling Beijing’s strategic ambitions.”

Other companies added include MGI Tech, which makes genomic sequencing tools, and Origincell Technology, which lawmakers say operates a mobile banking network and bio-storage technology. Neither company immediately responded to requests for comment.

US lawmakers pushed the Pentagon in 2024 to add some of the companies, including CATL, to the list. Ford Motor (NYSE: ) is building a battery plant in Michigan and plans to license CATL’s technology to produce cheap lithium-iron batteries at the facility — a move that has raised concerns among some lawmakers. Ford did not immediately comment Monday.

Although the term does not entail an immediate ban, it may damage the reputation of the companies involved and represents a strong warning to US businesses and firms about the risks of doing business with them. It may increase pressure on the Ministry of Finance to penalize companies.

Two companies on the previous list, drone maker DJI and Lidar-maker Hesai Technologies, both sued the Pentagon last year over their earlier designations, but remain on the revised list.

The Pentagon also removed six companies it said no longer met the designation requirements, including AI firm Beijing Megvii Technology, China Railway Construction Corporation Limited, China State Construction Group Co and China Telecommunications Corporation.




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