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 sequence of retaliatory strikes between the world’s two superpowers.
Tencent’s shares in the USA plunged by almost 10 p.c after the choice by the Protection Division, which additionally focused Chinese language battery, drone and delivery firms.
The Protection Division updates yearly an inventory of what it designates as “Chinese language army firms,” entities it has recognized as having each army and business know-how. There are actually 134 firms on the listing, which was posted to the Federal Register. It additionally added Modern Amperex Know-how Firm, often known as CATL, in addition to models of China Abroad Transport, often known as COSCO; the chipmaker Changxin Reminiscence Applied sciences; and the drone maker Autel Robotics. China Abroad Transport is likely one of the world’s largest delivery strains.
Placing Tencent on the listing 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 could “work with the Division of Protection to deal with any misunderstanding.”
The designation is a warning to companies in the USA that working with firms on the listing may get them barred from future Pentagon contracts.
To be added to the listing, an organization should 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 facility 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 in recent times, strain 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 just lately, the international locations have engaged in an escalating financial tit-for-tat. It started throughout the first time period of President-elect Donald J. Trump, after he took goal 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 firms and imposed bans on dual-use merchandise, just lately focusing on 140 Chinese language firms. On Thursday, the administration mentioned it was contemplating a brand new rule that might 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 would possibly.
Chinese language regulators have introduced an investigation into the American laptop chip firm Nvidia, banned the export of uncommon minerals to the USA and brought extra focused swipes at particular person firms to reveal their provide chain vulnerabilities.
Janet L. Yellen, the Treasury secretary, and her Chinese language counterpart, He Lifeng, held a digital assembly on Monday, their newest in a sequence meant to advertise discussions between the international locations’ financial policymakers. In accordance with a readout from the Treasury Division, each side aired considerations over rising financial tensions. Ms. Yellen warned that Chinese language polices that have an effect on American firms and employees would proceed to have a dangerous influence on the United States-China relationship, in line with the readout.
Mr. He raised considerations about Washington’s financial and commerce restrictions on China, Chinese language state media reported.
