US designates Tencent a Chinese military company

The United States has added several Chinese technology companies, including gaming and social media giant Tencent and battery maker CATL, to a list, claiming these companies collaborate with the Chinese military. This list aims to warn American companies and organizations about the risks of doing business with Chinese entities.

While being placed on the list does not mean an immediate ban, it could increase pressure on the U.S. Treasury to impose sanctions on these companies. Both Tencent and CATL have denied any association with the Chinese military, while Beijing has stated that this move is an "unreasonable suppression" of Chinese companies.

The U.S. Department of Defense (DOD) list of Chinese military companies, officially known as the Section 1260H list, is updated annually and now includes 134 companies. This is one of the measures taken by Washington to counter what it perceives as Beijing's use of Chinese companies, universities, and research programs to enhance its military power.

In response to the latest announcement, Tencent, which owns the WeChat messaging app, said its inclusion on the list was "clearly a mistake." A spokesperson for the company told the BBC, "We are not a military company or supplier. Unlike sanctions or export controls, this action has no impact on our business." CATL also called the move a mistake and stated that it is "not involved in any military-related activities."

Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, stated, "The U.S. approach violates the principles of market competition and international economic and trade rules that it has always advocated, and undermines the confidence of foreign companies in investing and operating in the United States." The Pentagon has faced pressure from U.S. lawmakers to include some companies, including CATL, on the list. This comes after U.S. auto giant Ford announced a $2 billion (1.6 billion GBP) investment to build a battery plant in Michigan, planning to license technology from CATL.

The announcement comes amid continued tensions between the world's two largest economies. At the same time, President-elect Donald Trump, who previously took a tough stance against Beijing, is set to return to the White House this month. Last year, drone maker DJI and lidar maker Hesai Technology sued the Pentagon for being included on the list; both remain on the updated list. On Tuesday, Tencent's shares fell by about 7% in Hong Kong trading, and CATL's shares dropped by about 4%.