Tencent Stock Sinks After Pentagon Labels It ‘Chinese Military’ Company | Global News Avenue

Shares of Tencent Holdings fell 7% in Hong Kong trading on Tuesday after the parent company of WeChat was placed on a list of “Chinese military companies” by the U.S. Department of Defense.

Tencent and electric vehicle battery maker CATL are both included on the updated Section 1260H list, which is updated annually and lists companies that work with the Chinese military. The blacklist carries no penalties, but blacklisted companies are prohibited from doing business with the Pentagon.

CATL (formally known as Contemporary New Energy Technology Co., Ltd.) is a large enterprise supplier to Tesla (Tesla) as well as Chrysler and Jeep parent Stellantis (STLA). Its shares fell 2% on the Shenzhen Stock Exchange.

Tencent calls designation a ‘mistake’

Tencent said in a filing to the Hong Kong Stock Exchange that “since the company is neither a Chinese military industrial enterprise nor a contributor to military-civilian integration in China’s defense industrial base, it believes its inclusion on the CMC list is a mistake.”

CATL, meanwhile, said it would work with the Pentagon “to address false designations, including taking legal action if necessary.”

USA Implement export controls Aims to limit China’s entry into advanced semiconductor chips in 2023. Such restrictions have made things even more difficult for U.S. companies such as Nvidia (NVDA) and Intel (international trade center) sells artificial intelligence chips to China.