The U.S. has added CXMT, Tencent, and CATL to its military-linked firms list under the Biden administration, following a Trump-era initiative. The list, updated annually, now includes 134 companies and raises potential reputational risks. Tencent and CATL have denied military affiliations and condemned their listings as mistakes.
The Biden administration has expanded its scrutiny of Chinese technology firms by including major companies like CXMT, Tencent, and CATL on a list linked to military support. This addition follows prior initiatives aimed at counteracting investments in companies associated with the Chinese military, initiated under the Trump administration. The updated list now encompasses 134 firms and poses potential reputational risks for those targeted without imposing immediate sanctions.
Tencent, recognized for its significant presence in the gaming sector and ownership of entities like Riot Games, expressed that its listing as a military-related company is an error. The firm clarified that it does not have military ties and emphasized that this designation does not disrupt its business operations. Similarly, CATL, a key player in the global electric vehicle battery market, also condemned its inclusion as misguided.
Additionally, CXMT’s designation as a military-linked entity occurs despite its recent exclusion from U.S. export controls. While the U.S. Treasury Department has yet to impose sanctions, the inclusion on the list signifies evident risks for U.S. businesses that continue to engage with these companies. Previous occurrences show that firms can be removed from the list, such as Xiaomi, which was delisted within months of its inclusion.
The inclusion of Chinese firms on the U.S. Pentagon’s military-linked list emerges from ongoing geopolitical tensions and concerns regarding China’s military influence in global technology sectors. Initiated by an executive order from the Trump administration, the list aims to curtail U.S. investments in firms alleged to support the Chinese military. The recent updates further illustrate the complex landscape of international trade and security, particularly affecting established companies with extensive market reach in technology and gaming.
The Biden administration’s decision to add companies like CXMT, Tencent, and CATL to the military-linked list highlights the continuing tensions between the U.S. and China regarding technology and security issues. Although immediate bans are not enforced, these designations can adversely affect company reputations and lead to potential sanctions, demonstrating the complex dynamics in international business and military affiliations.
Original Source: www.trendforce.com
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