The US Defense Department has added dozens of Chinese companies, including tech giant Tencent, battery maker CATL, and AI firm SenseTime, to its list of entities with alleged military ties. This move has prompted swift rebukes and promises of legal challenges from the affected companies.
The annual update to the "Chinese Military Companies" (CMC) list targets companies potentially involved in China's defense industrial base. The inclusion of these companies, effective in June 2026, restricts US Department of Defense dealings with them.
Tencent, the world's largest gaming company, experienced a significant stock drop of 7.3% Tuesday. The company vehemently denies any military ties, calling the inclusion "a mistake," and vowing to challenge the decision through legal channels and dialogue with the US Defense Department. The company's messaging platform WeChat is not affected.
Similarly, CATL, the global leader in battery production, disputed the listing, asserting no military involvement and promising to address the "false designation." The company's Shenzhen-listed stock fell 2.84%. SenseTime, an AI firm, also stated the listing lacks factual basis, insisting it has no material impact on its global operations.
China's Foreign Ministry responded by calling on the US to rectify the actions, characterizing them as "illegal unilateral sanctions" that hinder Chinese development.
In conclusion, the US's move has sparked immediate controversy, with Chinese companies denying any military ties and pledging to contest the listings. The situation underscores the increasingly fraught US-China relationship and the implications of the CMC list.
