U.S. adds Tencent and CATL to list of companies cooperating with Chinese military

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Technology conglomerate Tencent and leading global battery maker Contemporary Amperex Technology Co., Ltd. are among a group of Chinese companies that the Pentagon has identified as having suspected military ties, a move that sent the shares of the two industry giants plummeting.

Tencent’s U.S.-listed shares closed down 7.8% after the news broke, falling the same amount in Hong Kong trading on Tuesday. The company is China’s largest company by market capitalization.

CATL’s share price fell as much as 6% in Shenzhen, the largest drop in the past three months. CATL is an important supplier to the U.S. automaker Tesla, with a market share of approximately 38% in the global electric vehicle battery market.

The list is part of Washington’s broader efforts to contain China’s rise as a military superpower. Starting in June 2026, the Pentagon will not be able to sign contracts with companies on the list, and starting in 2027, it will not be able to purchase goods or services from these companies in the supply chain.

The U.S. Department of Defense described the list as a way to highlight and counter China’s so-called “military-civilian fusion strategy,” which supports China’s military modernization efforts by ensuring it has access to advanced technologies from Chinese companies, universities and research projects. . Disguised as civilian entities.

The United States has implemented multiple rounds of sweeping export controls aimed at limiting China’s ability to manufacture advanced semiconductor industries and making it harder for Beijing to develop artificial intelligence for military purposes.

In retaliation, Beijing has been tightening its own export controls. Last month, the United States banned shipments to the United States of certain minerals and metals used in semiconductor manufacturing and military hardware.

China’s Foreign Ministry said on Tuesday that Beijing “has always firmly opposed the United States’ generalization of national security concepts and the establishment of discriminatory lists with various names.” [and] Unreasonable suppression of Chinese companies.” It warned that China would “resolutely safeguard the legitimate rights and interests of Chinese enterprises and safeguard their legitimate rights to development”.

Being included on the Pentagon’s blacklist of Chinese military companies has no direct legal consequences and will not lead to sanctions. However, it does come with reputational risks.

A company spokesman said Tencent’s inclusion on the list was “obviously a mistake”.

“We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business. Nonetheless, we will work with the Department of Defense to resolve any misunderstandings.

CATL, which has been working with Tesla and Ford to license its battery manufacturing technology to U.S. factories, also called its inclusion on the list “a mistake.”

“CATL does not engage in any military-related activities,” the company said. “We welcome responsible discussions about our business operations and take questions about our business seriously.”

Chip maker Changxin Storage Technology, drone maker Autel Robotics and IT equipment maker Quectel Wireless Solutions were also included on the list.

COSCO Group, one of China’s largest shipping companies, appears on the list for the first time. Several of the group’s ferries, along with those of other commercial companies, took part in the People’s Liberation Army’s amphibious invasion of Taiwan exercises, according to ship tracking data and Chinese state media reports.

In recent years, Beijing has required civilian shipping companies to build new ships to military standards. The use of civilian ships is a key part of the PLA’s strategy, as the PLA itself lacks sufficient capabilities to transport troops and armored vehicles across the Taiwan Strait.

Additional reporting by Joe Leahy in Beijing and Kathrin Hille in Taipei