Blacklisting of Tencent, CATL fuels US-China tensions

The United States Department of Defense has been criticized by Chinese commentators for pushing unilateralism after it added Tencent Holdings and Contemporary Amperex Technology Co (CATL) to its “Chinese military companies” list.

The department on January 7 released an update of the Section 1260H list of Chinese military companies operating directly or indirectly in the US. The updated CMC list now includes 134 Chinese companies.

From HK$408.6 on January 6, shares of Tencent, the largest Hong Kong-listed company by market cap, have declined 9.5% to HK$369.6 as of January 10. Shares of the Shenzhen-listed CATL have dropped 4.2% to 246 yuan (US$33.5) during the period.

Apart from Tencent and CATL, Commercial Aircraft Corporation of China Limited (Comac), which produces China’s self-developed C919 airliners, was added to the CMC List for the second time. The company had been on the list in January 2021 but was then removed in June of the same year after winning an appeal.

Major suppliers to Comac’s C919 aircraft include the United States’ GE Aviation, Collins Aerospace and Honeywell Aerospace and France’s Safran Aircraft Engines.

A dozen subsidiaries of the previously-blacklisted Aviation Industry Corporation of China Ltd (AVIC), China Aerospace Science and Industry Corporation Limited (CASIC) and China Communications Construction Group (CCCG) were added to the CMC List.

The Hefei-based ChangXin Memory Technologies Inc (CXMT), which produces DRAM for use in computer servers and smart vehicles, is also on the blacklist now.

Last March, media reports said CXMT would be blacklisted because it planned to make high-bandwidth memory (HBM) chips, which can be used as artificial intelligence (AI) accelerators.

The defense