U.S. Adds Tencent, CATL, and Three Others to Section 1260H List of 134 Chinese Firms Allegedly Aiding Beijing's Military

Jan 6, 2025, 05:03 PM

The U.S. Department of Defense has added Tencent Holdings Ltd., a Shenzhen-based tech giant, along with Contemporary Amperex Technology Co. Ltd. (CATL), the world's biggest battery maker, Changxin Memory Technologies Inc., a chipmaker, Quectel Wireless, and Autel Robotics Co., a drone-maker, to its list of Chinese companies allegedly aiding Beijing's military. This designation, part of the annually updated 'Section 1260H list,' now includes 134 companies, comprising 56 entities and their subsidiaries. The move, disclosed in a Federal Register filing, is part of Washington's efforts to counter Beijing's military-civil fusion strategy, mandated by the Defence Authorisation Act of 1999 and the NDAA for fiscal year 2021. The inclusion on the list has led to a significant drop in Tencent's U.S.-listed shares, falling as much as 9.8% to $47.94, marking its largest intraday drop in nearly three months. Tencent has contested its inclusion, stating it was a 'clear mistake' and that it is not a military company or supplier. Similarly, CATL and Quectel have also denied any military involvement, with Quectel requesting the Pentagon to reconsider its designation. The inclusion on the list does not automatically impose specific sanctions but serves to deter U.S. companies from engaging in business with the listed entities.