The United States has added several Chinese technology companies, including gaming and social media giant Tencent and battery maker CATL, to a list of companies it says are working with the Chinese military.
The list serves as a warning to U.S. companies and organizations about the risks of doing business with Chinese entities.
While the inclusion does not mean an immediate ban, it may increase pressure on the U.S. Treasury Department to sanction companies.
Tencent and CATL have denied any involvement in China’s military, while Beijing said the move amounted to an “unreasonable suppression of Chinese companies.”
The Department of Defense’s (DOD) List of Chinese Military Companies, officially known as the Section 1260H List, is updated annually and now includes 134 companies.
It’s part of Washington’s approach to thwarting what it sees as Beijing’s efforts to increase its military power using technology from Chinese companies, universities and research programs.
In response to the latest announcement, Tencent, owner of messaging app WeChat, said its inclusion on the list was “clearly a mistake.”
“We are neither a company nor a military supplier. Unlike sanctions or export controls, this listing has no impact on our activities,” the group said in a statement to the Reuters news agency.
CATL also called the designation an error and said it “is not engaged in any military activity.”
“The US practices violate the principles of market competition and international economic and trade rules that it has always advocated, and undermine the confidence of foreign companies in their investments and operations in the United States,” said Liu Pengyu, spokesperson for the Chinese Embassy in Washington. .
The Pentagon had come under pressure from US lawmakers to add certain companies, including CATL, to the list.
The pressure came as US car manufacturing giant Ford announced it would invest $2bn (£1.6bn) to build a battery factory in Michigan. It announced its intention to license CATL’s technology.
Ford did not immediately respond to a BBC request for comment.
This announcement comes as relations between the world’s two largest economies remain tense.
Meanwhile, President-elect Donald Trump, who previously took a tough stance against Beijing, is expected to return to the White House this month.
The Pentagon was sued last year by drone maker DJI and Lidar maker Hesai Technologies over their inclusion on the list. They both remain on the updated list.
