The U.S. Department of Defense has added new Chinese companies to its list of firms allegedly linked to China’s military, raising concerns about security risks. This updated list, published on January 6, includes 134 companies under a program called “Section 1260H,” which aims to identify businesses with ties to China’s military.
Among the new companies on the list are Tencent Holdings, a giant in gaming and social media, and CATL, the world’s largest maker of electric vehicle batteries. Other notable additions include Changxin Memory Technologies, drone company Autel Robotics, and the shipping company COSCO. Additionally, two subsidiaries of China National Offshore Oil Corporation (CNOOC) were also named.
While being listed doesn’t automatically result in sanctions, it serves as a warning to U.S. companies about the risks of working with these Chinese firms. It could lead the U.S. Treasury Department to take further action. Tencent’s stock dropped by 7% in Hong Kong, and its U.S. shares fell by 8%. In response, Tencent denied having any ties to the military and stated that the listing wouldn’t affect its business. Similarly, CATL disagreed with its inclusion on the list, saying it has no military involvement. CATL’s shares also saw a drop of over 5%.
The Chinese embassy in Washington criticized the move, calling it unfair and urging the U.S. to correct what it called “discriminatory practices.” They also promised to protect the rights of Chinese companies.
This move by the Pentagon comes amid growing U.S. concerns about the potential security risks posed by Chinese companies. Tensions between the U.S. and China have been rising, and previous attempts to blacklist Chinese firms, like the case with Xiaomi in 2021, faced legal challenges. Some critics believe the list could harm the reputation of the companies on it. Craig Singleton, a China expert, said it was reckless for American companies to work with more and more Chinese businesses.
Other companies added to the list include MGI Tech, a company that works with genomic sequencing, and Origincell Technology, a bio-storage firm. U.S. lawmakers have raised concerns about CATL’s partnership with Ford to build a battery plant in Michigan, fearing it could pose risks to U.S. security.
However, six companies, including AI company Beijing Megvii Technology and China State Construction Group, were removed from the list because they no longer met the required criteria.
