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Chinese web giant Tencent was added to a U.S. government list of military-linked companies, spooking investors and triggering as much as a 7% plunge in its Hong Kong-listed shares.
Other companies were also added to the list, including battery maker Contemporary Amperex Technology (CATL), whose Shanghai-listed shares dropped 3% Tuesday morning.
The Pentagon publishes annually a list of “Chinese military companies” that it says operate directly or indirectly in the U.S. Although that designation—which according to American officials means they contribute to China’s military advancement—triggers no specific sanctions by the Pentagon, it functions as a blacklist and can hurt those companies’ international operations as potential partners assess new risks.
“Being added to this blacklist may impact investment or factory construction in America,” says Shen Meng, a Beijing-based managing director of boutique investment bank Chanson & Co. by WeChat. “Companies that work with the blacklisted firms may be stopped from participating in federal projects or investing in industries key to the U.S. government.”
A Tencent spokesperson says its inclusion on the Pentagon’s list is “clearly a mistake.
“We are not a military company or supplier,” the spokesperson says in a statement sent to Forbes. “Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding.”
CATL didn’t respond to an e-mailed request for comment. It earlier told Bloomberg it was a “mistake” to be included on the list.
Cofounded by billionaire Pony Ma, China’s third richest man with a net worth of $42.5 billion, Tencent has been actively expanding overseas to diversity revenue streams. One of the world’s largest videogame publishers, the web giant has invested in U.S. gaming firm Epic Games and electric car maker Tesla. Tencent, which also owns the hugely popular WeChat messaging app, has stakes in international companies including Swedish music streaming service Spotify and Finnish game developer Supercell.
CATL has announced plans to invest billions of dollars on factories in the U.S. Founded by Robin Zeng, who has a fortune of $35.9 billion that is largely based on a company stake, according to Forbes estimates, the company has been working with Ford since 2023 to build a battery factory in Michigan. It initially planned to invest $3.5 billion, although that amount has been downsized amid rising political tensions. CATL is also a key battery supplier to electric vehicle makers including Tesla.
Companies included on the Pentagon’s list can try to get off it. In 2021, American officials agreed to remove Chinese smartphone maker Xiaomi after the latter sued the U.S. government. But other companies that have sued the Pentagon—including drone maker DJI and laser sensor developer Hesai Technology—remain on this year’s list.
It also includes security software maker 360 Security Technology, smartphone and telecommunication giant Huawei and Shenzhen-listed gene sequencing company BGI Genomics.
