U.S. designates company as Chinese military company

The United States has added several Chinese technology companies to its list of companies that work with the Chinese military, including gaming and social media giant Tencent and battery maker Contemporary Amperex Technology.

The list is intended to warn U.S. companies and organizations about the risks of doing business with Chinese entities.

While inclusion does not mean an immediate ban, it could increase pressure on the U.S. Treasury Department to sanction the companies.

Tencent and CATL denied any involvement with the Chinese military, while Beijing said the decision amounted to “an unreasonable crackdown on Chinese companies.”

The U.S. Department of Defense's (DOD) list of Chinese military companies, officially known as the Section 1260H list, is updated annually and currently includes 134 companies.

It's part of Washington's response to Beijing's use of technology from Chinese companies, universities and research projects to bolster its military capabilities.

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

A spokesman for the company told the BBC: “We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business.”

CATL also called the designation a mistake and said the company “is not engaged in any military-related activities.”

Liu Pengyu, spokesperson of the Chinese Embassy in Washington, said that the US approach violated the principles of market competition and international economic and trade rules it has always advocated, and undermined the confidence of foreign companies in investing and operating in the United States. .

The Pentagon has come under pressure from U.S. lawmakers to put some companies on the list, including CATL.

The pressure comes after US car manufacturing giant Ford said it would invest $2bn (£1.6bn) to build a battery factory in Michigan. The company said it plans to license the technology from CATL.

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

The news comes as relations between the world's two largest economies remain tense.

Meanwhile, President-elect Donald Trump, who has previously taken a tough stance against Beijing, is due to return to the White House this month.

Last year, the Pentagon sued drone maker DJI and lidar maker Hesai Technology over their inclusion on the list. They all remain on the updated list.

Tencent shares fell about 7% in Hong Kong on Tuesday. CATL fell about 4%.