US Expands List of Chinese Companies Linked to Military Ties

Tuesday 07 January 2025 - 15:10

The U.S. Department of Defense has added several prominent Chinese companies to its list of entities allegedly connected to China’s military. These include Tencent, the leading gaming and social media company, and CATL, the largest global electric vehicle battery manufacturer. Other companies listed include Changxin Memory Technologies, Quectel Wireless, Autel Robotics, and COSCO Shipping, as well as entities linked to the state-owned China National Offshore Oil Corporation (CNOOC). This list, updated annually under U.S. law, now includes 134 companies, marking a significant step in restricting business with Chinese firms the U.S. deems a national security risk.

While the addition to the list does not result in immediate bans, it can damage the reputations of affected companies and serves as a strong cautionary message to U.S. businesses about the potential risks of engaging with them. The U.S. Treasury may also apply further sanctions. The Hong Kong-listed shares of Tencent and the Shenzhen-listed shares of CATL saw declines following their inclusion. Both companies have denied any involvement in military activities, calling the designation a mistake. Other companies listed, like Quectel, also rejected the accusations and are seeking reconsideration of their inclusion.

The Chinese government criticized the move, calling it discriminatory and emphasizing its intention to protect the rights of its firms. The inclusion of these companies is part of a broader U.S. strategy to restrict Chinese entities deemed to pose security threats. Despite the potential reputational damage, industry analysts believe the impact on Tencent’s U.S. gaming revenue will likely be minimal in the short term. This move follows similar actions in the past, such as the removal of Xiaomi from the list after a legal challenge.

In addition to these companies, several others, including MGI Tech and Origincell Technology, were also added to the list, with lawmakers having pushed for their inclusion due to concerns over their involvement in sensitive technologies. These actions signal a growing focus on safeguarding U.S. national security, with a reinforced effort to protect advanced technologies from Chinese influence.