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Tencent’s Hong Kong-listed shares fell 6.7 per cent on Tuesday after the Pentagon designated the tech big as a Chinese language navy firm working within the US.
The gaming and social media group, which owns ubiquitous Chinese language messaging app WeChat, was added to a listing of dozens of corporations the defence division considers to be working with the Chinese language navy straight or not directly, in line with a federal doc revealed on Monday.
Tencent’s US-listed shares closed down 7.8 per cent following the information.
The listing is a part of Washington’s broad efforts to counteract the rise of China as a navy superpower.
CATL, the world’s largest battery maker, was additionally added to the Pentagon’s listing. The producer, which is a vital provider to electric-vehicle maker Tesla, has a world EV battery market share of about 38 per cent. Its shares in mainland China opened down 3 per cent on Tuesday.
The Pentagon has described the listing as a strategy to spotlight and counter what it calls China’s “military-civil fusion technique”, which bolsters the Chinese language navy’s modernisation efforts by guaranteeing it may well purchase superior know-how from Chinese language corporations, universities and analysis programmes which can be masked as civilian entities.
The US has imposed a number of rounds of sweeping export controls designed to curtail China’s capacity to make a complicated semiconductor trade and make it tougher for Beijing to develop synthetic intelligence for navy use.
In retaliation, Beijing has been tightening its personal export controls. Final month it banned shipments to the US of certain minerals and metals utilized in semiconductor manufacturing and navy {hardware}.
Being added to the Pentagon’s Chinese language navy corporations blacklist has no direct authorized ramifications and doesn’t end in sanctions. Nevertheless, it does carry reputational dangers.
Tencent’s addition to the listing “is clearly a mistake”, an organization spokesperson stated.
“We aren’t a navy firm or provider. In contrast to sanctions or export controls, this itemizing has no influence on our enterprise. We’ll nonetheless work with the Division of Protection to deal with any misunderstanding,” the spokesperson added.
CATL, which has been working with Tesla and Ford to license its battery manufacturing know-how for factories within the US, additionally known as its inclusion on the listing “a mistake”.
“CATL just isn’t engaged in any navy associated actions”, the corporate stated. “We welcome accountable discourse on our enterprise operations and take questions on our enterprise critically.”
Chip producer ChangXin Reminiscence Applied sciences, drone maker Autel Robotics and IT gear maker Quectel Wi-fi Options had been additionally added to the listing.
Cosco, one in all China’s largest delivery corporations, joined the listing for the primary time. A number of of the group’s ferries, together with these of different industrial corporations, have participated in Individuals’s Liberation Military workout routines to practise an amphibious invasion of Taiwan, in line with ship monitoring knowledge and appearances in Chinese language state media experiences.
Beijing lately has been requiring civilian delivery corporations to construct their new vessels to military-capable requirements. Using civilian ships is a key a part of the PLA’s technique as a result of it lacks adequate capability of its personal to move troops and armoured autos throughout the Taiwan Strait.
The Pentagon won’t be able to contract corporations on the listing starting in June 2026, and from 2027 won’t be able to acquire items or providers that embody the listed corporations of their provide chains.
Extra reporting by Kathrin Hille in Taipei
