Chinese internet giant Tencent’s shares slumped sharply on Tuesday after the company was added to a Pentagon blacklist for its alleged links with the Chinese military, prompting criticism from authorities in Beijing and denial by the company.
Tencent said it is neither a Chinese military company nor a military-civil fusion contributor to the ... [+]
The Defense Department on Monday updated its list of “Chinese military companies operating in the United States,” to include Tencent and key Tesla battery supplier CATL.
The list, which now includes 134 companies, is intended to discourage American companies from doing business with the blacklisted firms, as it could potentially hinder their chances of winning a future Pentagon contract.
Tencent’s Hong Kong-listed shares fell to $48.82 (HK$ 379.60) on Tuesday, down 7.28% from the previous day.
In a regulatory filing, Tencent said it is “neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base,” and said it believed the “inclusion in the CMC List is a mistake.”
The company said it intends to “initiate a Reconsideration Process to correct this mistake” and will work with the Pentagon to “resolve any misunderstanding” and undertake “legal proceedings” if necessary.
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Shares of CATL, a key EV battery supplier for several carmakers including Tesla and Stellantis, also fell nearly 3% on Monday to $34.05 (CNY 249.45) on Tuesday after it was added to the list. The company also issued a statement saying it has “never engaged in any military-related business or activities” and said the designation was a mistake. “We will proactively engage with DoD to address the false designation, including legal action if necessary,” the statement added.
Chinese Foreign Ministry Spokesperson Guo Jiakun commented on the blacklisting in his daily press briefing on Tuesday, saying: “China stands firmly against the US’s practice of overstretching the concept of national security, making discriminatory lists in various names and going after Chinese companies to contain China’s high-quality development…We urge the US to immediately correct its wrongdoings, and end the illegal unilateral sanctions and long-arm jurisdiction on Chinese companies.”