USA blacklists Tencent as a "Chinese military company"

The US Department of Defense has classified the Chinese tech group Tencent, which is primarily active in social media and computer games, as a Chinese military company operating in the US. As a result, the WeChat operator's share price slipped in US trading on Monday. This was reported by the US news agency Bloomberg.

Tencent is one of several Chinese companies designated in a US Federal Register entry as "Chinese military companies" under the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (NDAA 2021). The U.S. federal law, which establishes the budget, spending, and policies of the U.S. Department of Defense for fiscal year 2021, requires the U.S. Secretary of Defense to prepare and publish a list of "Chinese military contractors" annually through December 31, 2030. Publication of this document (PDF) in the Federal Register is scheduled for Tuesday, January 7, 2025.

The Chinese battery manufacturer CATL (Contemporary Amperex Technology Co. Ltd.), China Telecom and the tech group Huawei are also on the list. Also included: Chinese aerospace companies, shipbuilders, manufacturers of video surveillance devices and mobile phone operators. The Pentagon's blacklist does not result in any specific sanctions, but is intended to prevent US companies from trading with the companies listed.

Inclusion on the list "clearly a mistake"

According to the Bloomberg report, Tencent described its presence on the list as a "clear mistake" in a statement. "We are not a military company or supplier," said a company spokesperson. "Unlike sanctions or export controls, this list has no impact on our business. However, we will work with the US Department of Defense to clear up any misunderstandings." The battery company CATL also spoke of a "mistake". According to the company, it is not involved in military activities.

The list of Chinese companies that work closely with the government in Beijing, its military or the domestic defense industry and are therefore under observation goes back to an order signed by then US President Donald Trump in 2020. According to this order, US investments in these Chinese companies are excluded. The order was and is part of the escalating trade war between the United States and China. As a result, the US chip manufacturer Intel was no longer allowed to supply processors to the listed Chinese server manufacturer Inspur. Inspur is still on the blacklist. The tech company Huawei, on the other hand, has been on the US government's blacklist since May 2019. US President Joe Biden extended the decree issued by his predecessor Trump in 2021.

However, some Chinese companies have been successful in being removed from the US blacklist, writes Bloomberg. In 2021, Chinese smartphone manufacturer Xiaomi reached an agreement with the US government and its classification as a Chinese military company was lifted. Last year, the Chinese chip manufacturer AMEC (Advanced Micro-Fabrication Equipment) was removed from the list. In the entry in the Federal Register, the US Department of Defense points out that companies on the blacklist "may request a review of this decision". According to the Pentagon, six Chinese companies have been removed from the list last published on January 31, 2024.

(akn)