The U.S. Makes an Unexpected Move by Adding Tencent and CATL to Its List of ‘Chinese Military Companies’

Entertainment giant Tencent and battery manufacturer CATL aren’t usually perceived as “Chinese military companies.” However, the Department of Defense has a different perspective. In fact, it recently added both companies to its list of entities reportedly working with China’s military.

This decision comes amid rising tensions between the two countries. For instance, China has started the year by contemplating export controls on car battery technology, a move that could have implications for the U.S.

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The Pentagon claims the list of Chinese military companies is under the National Defense Authorization Act. The DOD adds the list is intended to highlight and counteract China’s military-civilian fusion strategy, which is a crucial aspect of the People’s Liberation Army.

For the last few years, the U.S. has imposed a series of sanctions and trade restrictions against China. However, authorities believe that the Asian nation is strengthening its military capabilities through civilian enterprises, including certain companies.

When a company is added to the list, the DOD doesn’t impose direct restrictions. Yet, being on the list can damage the entity’s reputation and impact its business dealings abroad.

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For instance, some customers of Tencent and CATL may choose not to engage in specific business dealings or renew certain agreements with these companies. No company would want to be on the U.S. list of Chinese military companies.

According to Bloomberg, both CATL and Tencent have referred to this development as “a mistake.” Tencent representatives even claimed that they would collaborate with the DOD to clarify any misunderstandings.

The regulations permit listed companies to request a reconsideration of their status, but this process offers few guarantees. Drone manufacturer DJI has attempted unsuccessfully to be removed from the list and has even filed a lawsuit against the Pentagon.

Xiaomi was added to the list during President-elect Donald Trump’s first administration. After filing a lawsuit, the Asian smartphone manufacturer successfully got removed from the blacklist under President Joe Biden’s administration.

Image | Chris Yunker | Giorno2/Wikimedia Commons

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