US Adds Chinese Firms to Military List

a { color: #880000 !important; background: #ffeeee !important; } Latest NewsUS Adds Chinese Firms to Military ListInternational Relations > PoliticsThe U.S. Defense Department has updated its list of 'Chinese Military Companies' to include 134 firms, including Tencent and CATL. This move, effective June 2026, restricts U.S. defense procurement from these companies, prompting strong reactions from Beijing and the affected firms, which claim the designations are erroneous.

What's happened

The U.S. Defense Department has updated its list of 'Chinese Military Companies' to include 134 firms, including Tencent and CATL. This move, effective June 2026, restricts U.S. defense procurement from these companies, prompting strong reactions from Beijing and the affected firms, which claim the designations are erroneous.

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Impact on Companies

Stock Reactions: Tencent's shares fell 7.3%, while CATL's dropped 2.84% following the announcement.
Legal Actions: Both companies plan to challenge their inclusion, asserting they do not engage in military activities.

U.S.-China Relations

Escalating Tensions: This designation is part of a broader strategy by the U.S. to curb China's technological advancements.
Chinese Response: Beijing has condemned the U.S. actions as discriminatory and harmful to bilateral trade.

Future Implications

Potential Sanctions: While inclusion on the list does not immediately lead to sanctions, it pressures the U.S. Treasury to consider them.
Market Confidence: The designations may deter foreign investment in the listed companies, impacting their global operations.

What the papers say

According to AP News, Tencent described its inclusion on the list as 'clearly a mistake,' emphasizing that it is not a military company. The New York Times noted that the Pentagon's list serves as a warning to U.S. businesses about the risks of engaging with these firms. Meanwhile, the South China Morning Post highlighted China's strong opposition to the U.S. actions, stating that they undermine the rights of Chinese companies and hinder development. The Japan Times reported that the updated list includes various sectors, indicating a broadening scope of U.S. scrutiny over Chinese firms.

How we got here

The U.S. has increasingly restricted technology sharing with China, citing national security concerns. The annual update of the 'Chinese Military Companies' list reflects ongoing tensions and aims to counter China's military-civil fusion strategy.

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