US says technology giant Tencent works with Chinese military

The US has added several Chinese technology companies, including gaming and media giant Tencent and battery maker CATL, to a list of businesses it says are working with the Chinese military.

The list is a warning to American companies and corporations about the dangers of doing business with Chinese corporations.

Although the merger does not mean an immediate ban, it could increase pressure on the US Treasury Department to approve the companies.

Tencent and CATL have denied involvement with the Chinese military, with Beijing saying the decision was an “unreasonable crackdown on Chinese companies”.

The Department of Defense (DOD) list of Chinese military companies, known as the Section 1260H List, is updated every year and now includes 134 companies.

It is part of Washington’s strategy to counter what it sees as Beijing’s efforts to increase its military power by using technology from Chinese companies, universities and research programs.

In response to the latest announcement Tencent, which owns the messaging app WeChat, said its inclusion on the list was “a clear mistake.”

“We are not a military company or a supplier. Unlike sanctions or foreign controls, this list has no effect on our business,” a company spokesperson told the BBC.

CATL also called the name a mistake and said it “does not involve military action.”

“The US actions violate the principles of market competition and the international economic and trade rules that it has always promoted, and undermine the confidence of foreign companies to invest and work in the United States,” said Liu Pengyu, a spokesman for the Chinese embassy in Washington. .

The Pentagon was pressured by US lawmakers to add some of the companies, including CATL, to the list.

The pressure comes as US car giant Ford said it would spend $2bn (£1.6bn) to build a battery in Michigan. It has said it plans to license the technology to CATL.

Ford did not immediately respond to the BBC’s request for comment.

The announcement comes as relations between the two world economies remain strained.

Meanwhile, President-elect Donald Trump, who has taken a hard line in Beijing, is expected to return to the White House this month.

The Pentagon was challenged last year by drone manufacturer DJI and Lidar-maker Hesai Technologies over their inclusion on the list. Both remain on the updated list.

Shares of Tencent were trading about 7% lower in Hong Kong on Tuesday. CATL fell by almost 4%.