The US Defense Department has added dozens of Chinese companies, including gaming and technology company Tencent, artificial intelligence firm SenseTime and the world's largest battery maker CATL, to a list of companies it says have ties to the Chinese military.
In recent years, Washington has sought to limit the sharing of advanced technologies, including semiconductors and artificial intelligence, as a threat to national security.
The US Department of Defense updates its list of “Chinese Military Companies” or the CMC list every year. With the last edition, it included 134 companies. The National Defense Authorization Act of 2024 prohibits the Department of Defense from dealing with the companies listed beginning in June 2026.
Shares of Hong Kong-traded Tencent fell 7.3% on Tuesday, and the company said it would “begin a review process to correct this error,” seek talks with the U.S. Department of Defense and, if necessary, take legal action to remove her from the list. Tencent is the world's largest video game company and operates the Chinese messaging platform WeChat.
The companies will seek to overturn the decision
“As the company is neither a Chinese military company nor a participant in the military-civilian thermonuclear process in China's defense industrial base, it believes its inclusion in the CMC list is a mistake,” Tencent said in a statement to the Hong Kong Stock Exchange. .
“Unlike other lists maintained by the US government for sanctions or export control measures, CMC's listing applies only to US defense procurement, which does not affect the group's business,” it said.
Battery maker CATL said in a statement posted on its website that the company has “never been involved in any military business or activity” and said the designation would not have a negative impact on its operations.
Like Tencent, CATL says its listing was a “mistake” and that it will actively engage with the Pentagon to “address the false designation” and take legal action if necessary to protect the interests of the company and stakeholders. CATL shares fell 2.84% in Shenzhen.
Artificial intelligence company SenseTime said in a statement that the decision to include it on the list “had no basis in fact.”
“We strongly disagree,” SenseTime said in a statement, adding that the decision “does not have a material impact on our global operations.”
“SenseTime remains firmly committed to working with the relevant stakeholders to resolve this matter and to protect the interests of the company and our shareholders,” the company said.
At a daily briefing, Chinese Foreign Ministry spokesman Guo Jiakun called on the US to “immediately correct its wrong practices and lift the illegal unilateral sanctions and jurisdiction over Chinese companies.”
“China has consistently and firmly opposed the US overstretching the concept of national security, creating discriminatory lists under various pretexts, and unreasonably suppressing Chinese companies, impeding China's quality development,” Guo said.