Hong Kong-listed shares of Tencent fell 6.7 % on Tuesday after the Pentagon designated the tech big as a Chinese language army firm working in america.
The gaming and social media group, proprietor of the ever present Chinese messaging app WeChat, has been added to an inventory of dozens of corporations that the Defense Division considers to be working instantly or indirectly with the Chinese army, based on a federal doc released Monday.
U.S.-listed shares of Tencent closed down 7.eight % following the information.
The listing is a part of Washington’s broader effort to thwart China’s rise as a army superpower.
CATL, the world’s largest battery maker, was also added to the Pentagon’s record. The automaker, which is a serious provider to electrical car maker Tesla, has a worldwide electric car battery market share of round 38 %. Its shares in mainland China opened three % decrease on Tuesday.
The Pentagon described the listing as a method to highlight and counter what it calls China’s “military-civilian fusion technique,” which helps China’s army modernization efforts by making certain it may possibly purchase cutting-edge applied sciences from hidden Chinese corporations, universities and analysis packages. as civil entities.
America has imposed several rounds of drastic export controls meant to limit China’s means to create a complicated semiconductor business and make it harder for Beijing to develop synthetic intelligence for army use.
In retaliation, Beijing tightened its own export controls. Last month, he banned shipments to the USA of sure minerals and metals used in the manufacture of semiconductors and army gear.
Adding Chinese language army corporations to the Pentagon’s blacklist has no direct authorized consequences and does not end in sanctions. Nevertheless, this carries reputational risks.
Tencent’s addition to the record “is clearly a mistake,” a company spokesperson stated.
“We're neither a company nor a army supplier. In contrast to sanctions or export controls, this listing has no influence on our enterprise. We'll, nevertheless, work with the Ministry of Protection to clear up any misunderstandings,” the spokesperson added.
CATL, which is working with Tesla and Ford to license its battery manufacturing know-how to factories in the USA, also referred to as its inclusion on the listing a “mistake.”
“CATL isn't engaged in any army actions,” the corporate stated. “We help responsible discourse about our enterprise operations and take matters concerning our enterprise critically. »
Chipmaker ChangXin Memory Technologies, drone maker Autel Robotics and IT gear maker Quectel Wireless Options have been additionally added to the record.
Cosco, one in every of China’s largest delivery corporations, joined the listing for the first time. Several of the group’s ferries, as well as those of different trading corporations, participated in Individuals’s Liberation Military workouts to apply an amphibious invasion of Taiwan, based on ship tracking knowledge and appearances in Chinese state media .
In recent times, Beijing has required civilian delivery corporations to construct their new ships to army standards. Using civilian ships is a key a part of the PLA’s strategy as a result of it doesn't have enough capability of its personal to move troops and armored automobiles across the Taiwan Strait.
The Pentagon will not have the ability to subcontract to corporations on the record starting in June 2026, and starting in 2027, it is going to not have the ability to purchase goods or providers that embrace listed corporations in their provide chains.
Further reporting by Kathrin Hille in Taipei