An anonymous reader quotes a report from Reuters: The U.S. Defense Department said on Monday it has added Chinese tech giants including gaming and social media leader Tencent Holdings and battery maker CATL to a list of firms it says work with China’s military. The list also included chip maker Changxin Memory Technologies, Quectel Wireless and drone maker Autel Robotics, according to a document published on Monday. The annually updated list (PDF) of Chinese military companies, formally mandated under U.S. law as the “Section 1260H list,” designated 134 companies, according to a notice posted to the Federal Register.
U.S.-traded shares of Tencent, which is also the parent of Chinese instant messaging app WeChat, fell 8% in over-the-counter trading. Tencent said in a statement that its inclusion on the list 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.” 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.”
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 U.S. entities and firms about the risks of conducting business with them. It could also add pressure on the Treasury Department to sanction the companies.
Two previously listed companies, drone maker DJI and Lidar-maker Hesai Technologies, both sued the Pentagon last year over their previous designations, but remain on the updated list. The Pentagon also removed six companies it said no longer met the requirements for the designation, including AI firm Beijing Megvii Technology, China Railway Construction Corporation Limited, China State Construction Group Co and China Telecommunications Corporation.