The Pentagon on Monday labeled Tencent, the Chinese language social media and gaming large, as a Chinese language army enterprise working in the USA, the most recent motion in an escalating collection of retaliatory strikes between the world’s two superpowers.
Tencent’s shares in the USA plunged by practically 10 p.c after the choice by the Protection Division, which additionally focused Chinese language battery, drone and transport corporations.
The Protection Division updates yearly a listing of what it designates as “Chinese language army corporations,” entities it has recognized as having each army and business know-how. There are actually 134 corporations on the record, which was posted to the Federal Register. It additionally added Modern Amperex Know-how Firm, often called CATL, in addition to items of China Abroad Delivery, often called COSCO; the chipmaker Changxin Reminiscence Applied sciences; and the drone maker Autel Robotics. China Abroad Delivery is without doubt one of the world’s largest transport traces.
Placing Tencent on the record was “clearly a mistake,” a spokeswoman for the corporate mentioned in an emailed assertion. “We’re not a army firm or provider.”
Tencent additionally mentioned that the itemizing would have “no influence on our enterprise,” and that it might “work with the Division of Protection to handle any misunderstanding.”
The designation is a warning to companies in the USA that working with corporations on the record may get them barred from future Pentagon contracts.
To be added to the record, an organization will need to have some enterprise operations inside the USA. For instance, CATL is licensing its battery know-how to the American carmaker Ford Motor, which is constructing a $3.5 billion electrical car manufacturing unit in Michigan.
Shares of Tencent, which is listed in Hong Kong, and CATL, which trades in Shenzhen, China, slumped in Asia buying and selling.
CATL didn’t instantly reply to a request for remark.
As tensions between the USA and China have escalated lately, stress has been rising from lawmakers to search out methods to thwart China’s advances technologically and militarily.
In 2021, the Chinese language shopper electronics firm Xiaomi efficiently sued the Pentagon to be faraway from the blacklist after arguing in federal court docket that it had no ties to the Chinese language army.
Extra lately, the international locations have engaged in an escalating financial tit-for-tat. It started through the first time period of President-elect Donald J. Trump, after he took intention at China with tariffs and restrictions on commerce. At the moment, Beijing took largely symbolic and measured responses in retaliation.
Since then, the Biden administration has expanded its restrictions on Chinese language corporations and imposed bans on dual-use merchandise, lately concentrating on 140 Chinese language corporations. On Thursday, the administration mentioned it was contemplating a brand new rule that would prohibit or ban Chinese language drones in the USA.
Beijing has adopted an more and more aggressive stance because it prepares for a second presidential time period with Mr. Trump, an outspoken critic of China and its financial may.
Chinese language regulators have introduced an investigation into the American pc chip firm Nvidia, banned the export of uncommon minerals to the USA and brought extra focused swipes at particular person corporations to reveal their provide chain vulnerabilities.
