Tencent Shares Slide After Pentagon Blacklists Chinese Tech Giant – Forbes
Chinese internet giant Tencent’s shares slumped sharply on Tuesday after the company was added to a Pentagon blacklist for its alleged links with the Chinese military, prompting criticism from authorities in Beijing and denial by the company.Tencent said it is neither a Chinese military company nor a military-civil fusion contributor to the … [+] Chinese defense industrial base.The Defense Department on Monday updated its list of “Chinese military companies operating in the United States,” to include Tencent and key Tesla battery supplier CATL.The list, which now includes 134 companies, is intended to discourage American companies from doing business with the blacklisted firms, as it could potentially hinder their chances of winning a future Pentagon contract.Tencent’s Hong Kong-listed shares fell to $48.82 (HK$ 379.60) on Tuesday, down 7.28% from the previous day.In a regulatory filing, Tencent said it is “neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base,” and said it believed the “inclusion in the CMC List is a mistake.”The company said it intends to “initiate a Reconsideration Process to correct this mistake” and will work with the Pentagon to “resolve any misunderstanding” and undertake “legal proceedings” if necessary.Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you’ll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.Shares of CATL, a key EV battery supplier for several carmakers including Tesla and Stellantis, also fell nearly 3% on Monday to $34.05 (CNY 249.45) on Tuesday after it was added to the list. The company also issued a statement saying it has “never engaged in any military-related business or activities” and said the designation was a mistake. “We will proactively engage with DoD to address the false designation, including legal action if necessary,” the statement added.Chinese Foreign Ministry Spokesperson Guo Jiakun commented on the blacklisting in his daily press briefing on Tuesday, saying: “China stands firmly against the US’s practice of overstretching the concept of national security, making discriminatory lists in various names and going after Chinese companies to contain China’s high-quality development…We urge the US to immediately correct its wrongdoings, and end the illegal unilateral sanctions and long-arm jurisdiction on Chinese companies.”The blacklisting comes just weeks before the inauguration of President-elect Donald Trump. During his first term, Trump targeted Tencent’s flagship service, WeChat, a so-called “super app” or “everything app” with more than 1.38 billion users worldwide. The app, which began as a text messaging service, now includes a multitude of features including voice and video calling, payments, video games, online shopping and receiving public broadcasts. In 2020, Trump signed an executive order that effectively tried to ban WeChat in the U.S. and prevent American companies from using the service. Tencent was able to successfully challenge the ban in court. Sen. Marco Rubio, R-Fla., who is Trump’s nominee to be Secretary of State, called for the blacklisting of CATL by the Pentagon last year, alleging it had “deep ties to the Chinese Communist Party and its armed wing, the People’s Liberation Army.”One Community. Many Voices. Create a free account to share your thoughts. Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.In order to do so, please follow the posting rules in our site’s Terms of Service. We’ve summarized some of those key rules below. Simply put, keep it civil.Your post will be rejected if we notice that it seems to contain:User accounts will be blocked if we notice or believe that users are engaged in:So, how can you be a power user?Thanks for reading our community guidelines. Please read the full list of posting rules found in our site’s Terms of Service.
