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U.S. Adds Tencent and CATL to Military-Linked List, Shares Drop Over 7% in Hong Kong, Nearly 8% in U.S.

Jan 6, 2025, 10:12 PM

The U.S. Department of Defense has added Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd. (CATL) to a list of Chinese companies alleged to have ties with the Chinese military. This designation led to a significant drop in Tencent's shares, falling over 7% in Hong Kong and nearly 8% in U.S. trading. CATL, a major supplier to companies like Ford and Tesla, also saw its shares decline by 5% in Shenzhen. Both companies have denied any military connections, with Tencent stating that its inclusion on the list was 'clearly a mistake' and that it is not a military company or supplier. The listing, part of the U.S. effort to address concerns over Chinese military-civil fusion, does not impose immediate sanctions but may discourage U.S. firms from engaging with the listed entities. The addition of these companies to the list is seen as a move that could escalate tensions between the U.S. and China, particularly in the technology and electric vehicle sectors.