A mistake, says Tencent after US adds it to military list
Defence department updates its list of companies it says work with the Chinese military
06 January 2025 - 21:04
UPDATED 06 January 2025 - 22:29
by Michael Martina, David Shepardson and Karen Freifeld
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A Tencent booth at the World Artificial Intelligence Conference in Shanghai, China, July 6 2023. Picture: REUTERS/ALY SONG
Washington/New York — The US defence department said on Monday it has added Chinese tech giants including gaming and social media leader Tencent Holdings to the list of firms it says work with China’s military.
Tencent said in a statement that its inclusion was “clearly a mistake”. It added: “We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business.”
US-traded shares of Tencent, which is also the parent of Chinese instant messaging app WeChat, fell 8% in over-the-counter trading.
The list also includes battery maker CATL, chip maker Changxin Memory Technologies, Quectel Wireless and drone maker Autel Robotics, according to a document published on Monday. The annually updated list of Chinese military companies, formally mandated under US law, designated 134 companies, according to a notice posted to the Federal Register.
CATL called the designation a mistake, saying it “is not engaged in any military-related activities”.
A Quectel spokesperson said the company “does not work with the military in any country and will ask the Pentagon to reconsider its designation, which clearly has been made in error”.
The other companies and the Chinese embassy in Washington did not respond to requests or did not immediately comment.
Amid strained relations between the world’s two biggest economies, the updated list is one of numerous actions taken by Washington in recent years to highlight and restrict Chinese companies it says pose security risks.
Craig Singleton, a China expert at the Foundation for Defense of Democracies, said the additions showed that it was “reckless” for American firms to conduct business with a growing swath of Chinese corporations.
“The US isn’t just safeguarding a handful of technologies any more,” he said. “The garden of sensitive technologies is growing, and the fence protecting them is being fortified. Today’s list lays bare that these aren’t just commercial companies. They’re critical enablers of China’s military modernisation, directly fuelling Beijing’s strategic ambitions.”
Other companies added include MGI Tech, which makes genomic sequencing instruments, and Origincell Technology, which legislators have alleged operates a cell bank network and bio-storage technologies. Neither firm immediately responded to requests for comments.
US legislators had pushed the Pentagon throughout 2024 to add some of the companies, including CATL, to the list. Ford Motor is building a battery plant in Michigan and plans to license CATL technology to produce low-cost lithium-iron batteries at the facility, a move that has sparked concerns by some legislators. Ford did not immediately comment on Monday.
While the designation does not involve immediate bans, it can be a blow to the reputations of affected companies and represents a stark warning to US entities and firms about the risks of conducting business with them. It could also add pressure on the US treasury to sanction the companies.
The Pentagon removed six companies it said no longer met the requirements for the designation, including artificial intelligence firm Beijing Megvii Technology, China Railway Construction Corporation, China State Construction Group and China Telecommunications Corporation.
Update: January 6 2025 This story has been updated with additional information.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
A mistake, says Tencent after US adds it to military list
Defence department updates its list of companies it says work with the Chinese military
Washington/New York — The US defence department said on Monday it has added Chinese tech giants including gaming and social media leader Tencent Holdings to the list of firms it says work with China’s military.
Tencent said in a statement that its inclusion was “clearly a mistake”. It added: “We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business.”
US-traded shares of Tencent, which is also the parent of Chinese instant messaging app WeChat, fell 8% in over-the-counter trading.
The list also includes battery maker CATL, chip maker Changxin Memory Technologies, Quectel Wireless and drone maker Autel Robotics, according to a document published on Monday. The annually updated list of Chinese military companies, formally mandated under US law, designated 134 companies, according to a notice posted to the Federal Register.
CATL called the designation a mistake, saying it “is not engaged in any military-related activities”.
A Quectel spokesperson said the company “does not work with the military in any country and will ask the Pentagon to reconsider its designation, which clearly has been made in error”.
The other companies and the Chinese embassy in Washington did not respond to requests or did not immediately comment.
Amid strained relations between the world’s two biggest economies, the updated list is one of numerous actions taken by Washington in recent years to highlight and restrict Chinese companies it says pose security risks.
Craig Singleton, a China expert at the Foundation for Defense of Democracies, said the additions showed that it was “reckless” for American firms to conduct business with a growing swath of Chinese corporations.
“The US isn’t just safeguarding a handful of technologies any more,” he said. “The garden of sensitive technologies is growing, and the fence protecting them is being fortified. Today’s list lays bare that these aren’t just commercial companies. They’re critical enablers of China’s military modernisation, directly fuelling Beijing’s strategic ambitions.”
Other companies added include MGI Tech, which makes genomic sequencing instruments, and Origincell Technology, which legislators have alleged operates a cell bank network and bio-storage technologies. Neither firm immediately responded to requests for comments.
US legislators had pushed the Pentagon throughout 2024 to add some of the companies, including CATL, to the list. Ford Motor is building a battery plant in Michigan and plans to license CATL technology to produce low-cost lithium-iron batteries at the facility, a move that has sparked concerns by some legislators. Ford did not immediately comment on Monday.
While the designation does not involve immediate bans, it can be a blow to the reputations of affected companies and represents a stark warning to US entities and firms about the risks of conducting business with them. It could also add pressure on the US treasury to sanction the companies.
The Pentagon removed six companies it said no longer met the requirements for the designation, including artificial intelligence firm Beijing Megvii Technology, China Railway Construction Corporation, China State Construction Group and China Telecommunications Corporation.
Update: January 6 2025
This story has been updated with additional information.
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