US Adds Tencent, CATL to List of 134 Chinese Military Companies, No Sanctions but Reputational Risks

Jan 6, 2025, 07:50 PM

The U.S. Department of Defense has added Tencent Holdings Ltd., CATL, Autel Robotics, Changxin Memory Technologies, and Quectel Wireless to its list of Chinese military companies operating in the U.S. This designation, part of the annual update to the 'Section 1260H' list, now includes 134 companies. The move is intended to counter Beijing's military-civil fusion strategy, though it does not impose immediate sanctions or direct legal ramifications. Tencent, a major player in social media and gaming, and CATL, the world's largest battery maker with a global EV battery market share of about 38%, have both contested their inclusion, asserting that they are not military companies or suppliers. Tencent's US-listed shares fell as much as 9.8% following the news. The listing may impact their business dealings in the U.S. by discouraging American firms from trading with them due to reputational risks. Additionally, starting in June 2026, the Pentagon will not be able to contract with companies on this list.