In brief
The latest update to the Pentagon's military business list has sparked a new wave of tension between the US and China as firms like Tencent and CATL dispute their roles.
The U.S. Department of Defense has named several Chinese technology firms, including the well-known gaming and social media giant Tencent, as well as battery manufacturer CATL, on a new list that associates them with the Chinese military. This roster acts as a cautionary measure for U.S. companies and organizations regarding potential risks linked to partnerships with Chinese businesses. While being placed on the list does not directly lead to a ban, it heightens the likelihood of increased scrutiny and possible sanctions from the U.S. Treasury Department.Tencent, which is famous for its widely-used messaging app WeChat, has firmly rejected the allegations, expressing that it is "not a military company or supplier" and considers the listing to be "clearly a mistake." Meanwhile, CATL, which is the world’s largest electric vehicle battery maker, echoed this sentiment, asserting that they do not engage in any military activities. They characterized the U.S. actions as an "unreasonable suppression of Chinese companies," with Beijing condemning the move as detrimental to foreign investment confidence in the U.S. market.The Pentagon's list, known formally as the Section 1260H list, has been updated annually and now contains a total of 134 companies it believes contribute to China's military capabilities through their technology, research, and academic ties. The recent additions have been influenced by pressure from U.S. lawmakers, particularly in light of major U.S. automotive manufacturer Ford's recent $2 billion investment to establish a battery plant in Michigan, which will potentially involve licensing technology from CATL. As a result, tensions have escalated even further between the two superpowers.President-elect Donald Trump, who has maintained a hardline approach toward Beijing in the past, is set to take office once more this month, which may further impact U.S.-China relations. Notably, the Pentagon faced legal challenges from drone manufacturer DJI and Lidar company Hesai Technologies last year over their inclusion on the military list; both companies remain included in the latest update. The growing distrust between the world's two largest economies continues to cast a shadow on international trade and cooperation.
