Official US government announcement or credible news sources

US Adds Tencent, CATL to Chinese Military Companies List; Tencent Shares Fall Over 7%

Jan 7, 2025, 03:01 AM

The US Department of Defense has added several prominent Chinese companies, including technology giant Tencent Holdings, battery maker CATL, and memory chip manufacturer Changxin Memory Technologies (CXMT), to its list of "Chinese military companies" under Section 1260H. The list, released on Monday, alleges that these firms support China's military. Following the announcement, shares of Tencent declined over 7% in Hong Kong trading on Tuesday, while CATL's shares fell more than 5% in Shenzhen. Tencent, known for its WeChat messaging app and as one of the world's largest video game companies, stated that its inclusion on the list is a mistake. A company spokesperson said, "Tencent's inclusion on this list is clearly a mistake. We are not a military company or military supplier." The company intends to engage with US authorities to address the designation. CATL, the world's largest electric vehicle battery manufacturer, also denied any military affiliations, asserting that it has never engaged in any military-related business or activities. CATL stated it would proactively engage with the US Department of Defense to address the false designation, including legal means. The move reflects ongoing tensions between the US and China, with the US government increasing scrutiny of Chinese companies over national security concerns. While the designation does not impose immediate regulatory impacts, it signals potential future targets and may result in restrictions on US investments and contracts.