The US Department of Defense recently updated its registry space 1260h to include several Chinese technological companies, such as Tencent and CATL batteries, in the list of enterprises related to the military structures of China. This annual update now features 134 companies, raising concerns about their connections to China’s military.
While being included in the list does not immediately result in sanctions, it does increase pressure on the US Treasury to potentially introduce restrictions against these companies. The decision was made in light of concerns that Chinese firms and research institutions are aiding in the strengthening of China’s military capabilities.
Tencent, the company behind the popular WeChat application, has dismissed its inclusion in the list as erroneous, stating that it will not impact its business operations. Similarly, CATL has denied any ties to military structures, denouncing Washington’s decision as a violation of international economic norms.
In response to the inclusion of these companies, China’s Embassy in the United States condemned the action, accusing it of undermining the trust of foreign investors in the American market. The embassy’s representative, Li Penyuy, criticized the US for contradicting the principles of free competition, which they claim to champion.
Interest in CATL has grown following the announcement by American automaker Ford to invest $2 billion in a battery production plant in Michigan utilizing CATL technologies. This news resulted in a 7% drop in Tencent shares on the Hong Kong Exchange and a 4% decrease in CATL shares.