In HONG KONG, the U.S. Defense Department has included a number of Chinese companies, such as Tencent, SenseTime, and CATL, on a list of companies with links to China’s military. This move has led to protests from some companies, with efforts being made to reverse the decision.
In an attempt to safeguard national security, the U.S. has been limiting the sharing of advanced technology, including semiconductors and artificial intelligence. The Defense Department updates its list of “Chinese Military Companies” on an annual basis. There are currently 134 companies on this list following the latest update. As per the National Defense Authorization Act of 2024, the Department of Defense is prohibited from engaging with these designated companies starting June 2026.
The shares of Tencent, which is the world’s largest video gaming company and operates WeChat, dropped by 7.3% in Hong Kong on Tuesday. Tencent has expressed its intention to challenge this designation, stating that it will request a reassessment, engage in discussions with the Defense Department, and resort to legal action if necessary to be removed from the list.
“As the company is neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base, it believes that its inclusion in the CMC List is a mistake,” Tencent said in an announcement to the Hong Kong Stock Exchange. “Unlike other lists maintained by the U.S. Government for sanctions or export control measures, inclusion in the CMC List relates only to U.S. defense procurement, which does not affect the business of the Group,” it said.
Battery maker CATL said in a statement posted on its website that the company “has never engaged in any military-related business or activities” and said the designation would not have adverse impact on its operations.
Like Tencent, CATL maintains that its inclusion to the list was a “mistake” and that it would proactively engage with the DoD to “address the false designation” and take legal action if necessary to protect company and stakeholder interest. CATL’s stock fell 2.84% in Shenzhen.
AI company SenseTime said in a statement that the decision to include it on the list had “no factual basis.”
“We firmly disagree with it,” SenseTime’s statement read, adding that the decision has “no material impact on our global operations.”
“SenseTime remains firmly committed to working collaboratively with the relevant stakeholders to address this matter, and to safeguarding the interests of the company and our shareholders,” the company said.
During a daily news briefing, Ministry of Foreign Affairs spokesperson Guo Jiakun urged the U.S. to “immediately correct its wrong practices, and lift the illegal unilateral sanctions and long-arm jurisdiction on Chinese companies.”
“China consistently and firmly opposes the U.S. overstretching the concept of national security, creating discriminatory lists under various pretexts, and unwarrantedly suppressing Chinese companies, hindering China’s high-quality development,” Guo said.
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