Een beetje laat. Opgemerkt op Yahoo:
U.S. Adds Tencent and Tesla Supplier to Its Chinese Military List. Why ‘Pandora’s Box’ Has Opened for Chinese Stocks.
By
Reshma Kapadia
Last Updated: Jan. 7, 2025 at 3:37?p.m. ET
First Published: Jan. 7, 2025 at 12:32?p.m. ET
The Pentagon on Tuesday added Tesla battery-maker Contemporary Amperex Technology, or CATL, and internet and gaming giant Tencent Holdings to its list of companies it says have ties to the Chinese military. Even though the list has a limited impact on either company’s business, the move rattled investors who fear the darkening clouds looming over Chinese companies as the U.S.-China relationship deteriorates.
Shares of CATL closed down 3% to 249.45 yuan overnight while Tencent’s shares closed down 7% in Hong Kong at HK$379.60. The iShares MSCI China exchange-traded fund was down 0.6% in midday trading at $45.34.
Chinese companies have faced scrutiny as the U.S. increasingly views China as a strategic rival and military threat. Congress called on the Biden administration to probe Ford Motor’s plans to build a plant in Michigan with battery giant CATL, while the first Trump administration tried to ban Tencent’s ubiquitous WeChat messaging app.
The Department of Defense has published its list of so-called Chinese military companies annually since 2021 as part of its “effort in highlighting and countering the PRC’s Military-Civil Fusion strategy.” CATL and Tencent were new additions to the list. Placement on the list likely restricts either company from getting Defense Department contracts. Analysts say that means very limited to no impact for social media and gaming giant Tencent and very limited impact for CATL, the biggest supplier of electric vehicle batteries, who also makes energy storage systems.
Investors are worried about the reputational hit as the Defense Department list has informed other lists. As the U.S. tries to restrict China’s access to critical technology—through export restrictions from the Commerce Department and plans for outbound investment restrictions—placement on either of those lists would be much more significant and push investors to rethink their investments further.
CATL said it would work with the Defense Department to address the “false designation” including pursuing legal action if needed. The company said it “has never engaged in any military-related business or activities, so this designation by the Department of Defense is a mistake.”
Tencent said its inclusion on the list “is clearly a mistake” since it is neither a Chinese military company nor a company that contributes to China’s defense industrial base. Tencent also said the inclusion had no impact on its business and that it plans to engage in talks with the Defense Department and if needed will consider legal action.
In the past, some companies, like smartphone maker Xiaomi, have successfully sued to get themselves off the list. But the cloud over the company pushed many investors to sell.
Among the companies on the list, CATL and Tencent are most widely held by U.S. investors and intertwined with U.S. companies, making the designation of these companies versus Chinese defense industrial companies more eye-catching. The designation also illustrates the complexities of a push to decouple the U.S. and China.
“Including a company such as CATL, whose customers are overwhelmingly in the consumer space and which has a global footprint in a critical industry sets a very dangerous precedent,” says Paul Triolo, partner at consultancy Albright Stonebridge Group.