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[News] U.S. Adds Tech Giants CXMT, Tencent, and CATL to List of Chinese Firms Linked to Military Support
Before Trump’s inauguration in late January, another wave of U.S. counterattacks on Chinese companies seems to be initiated by the Biden administration. According to Reuters, the U.S. Defense Department announced on Monday the addition of several Chinese tech giants, including DRAM maker CXMT, Tencent and battery maker CATL, to a list of firms allegedly linked to China’s military.
The annually updated “Section 1260H list” of Chinese military-linked companies now includes 134 firms, according to a Federal Register notice cited by Reuters.
According to The Verge, The designations stem from a 2020 executive order by President-elect Donald Trump, banning U.S. investments in companies linked to the Chinese military.
An Unexpected List with Gaming Giant Pops up
The list is somehow surprising, as Tencent, known for its popular messaging app WeChat, is a major player in the gaming industry, owning Riot Games and investing in companies like Epic Games and Ubisoft, as per The Verge.
Tencent stated that its inclusion on the list is “clearly a mistake,” emphasizing it is not a military company or supplier, as noted by Reuters. The company also reportedly noted that the listing does not affect its business as it is not like sanctions or export controls.
CATL is known as the world’s largest EV battery maker, which supplies batteries for Tesla, Ford, Volkswagen, BMW, and others. CATL called the designation a mistake as well, stating it has no military-related activities, according to Reuters.
It is worth noting that CXMT, China’s leading memory maker which was excluded in U.S.’s latest chip export curbs in December, 2024, has been added to the military blacklist this time.
No Immediate Bans, but Potential Business Risks afterwards
Though the designation does not impose immediate bans, it harms company reputations and warns U.S. businesses of risks in dealing with them, as per Reuters. It may also push the Treasury Department to impose sanctions, the report adds.
Notably, the report from The Verge indicates that China’s top drone maker DJI, added to the list in 2022, claims U.S. Customs is blocking its drone imports and that the designation has caused “lost business deals” and a reputation as a “national security threat.”
Nevertheless, The Verge notes that these companies don’t always stay on Pentagon’s list. For example, the U.S. removed Chinese phone maker Xiaomi just months after adding it in 2021.
This time, the Pentagon also removed six companies, including AI firm Megvii Technology and China Railway Construction, as they no longer met the designation’s criteria, the report from Reuters says.
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