Blacklist Blowout: Pentagon Expands List of Chinese Companies for Allegedly Military Ties – SOFREP News Team
In a move that underscores the growing rift between the United States and China, the US Defense Department recently added 134 Chinese companies to its annual “Chinese Military Companies” (CMC) list, citing alleged ties to China’s military.
This updated list, mandated under the “Section 1260H” of US law, includes major players like Tencent Holdings, CATL, SenseTime, and several others.
While the immediate implications may be limited, the decision has far-reaching geopolitical and economic consequences, escalating tensions between the world’s two largest economies.
A Broader Effort to Protect National Security
The CMC list is part of Washington’s broader strategy to restrict the flow of sensitive technologies, such as semiconductors and artificial intelligence, to Chinese firms perceived as threats to US national security.
The list prohibits the US Department of Defense from engaging with these companies starting June 2026, as outlined in the National Defense Authorization Act of 2024.
However, the implications extend far beyond defense procurement, serving as a stark warning to American entities about the risks of conducting business with companies linked to China’s defense industry.
This latest update includes high-profile firms across diverse sectors, such as Tencent, the world’s largest gaming company and operator of the ubiquitous WeChat platform; CATL, the world’s leading electric vehicle (EV) battery manufacturer; and SenseTime, a global leader in artificial intelligence.
Other notable additions include COSCO Shipping, China’s largest shipping company, and MGI Tech, a genomic sequencing firm.
In a move that underscores the growing rift between the United States and China, the US Defense Department recently added 134 Chinese companies to its annual “Chinese Military Companies” (CMC) list, citing alleged ties to China’s military.
This updated list, mandated under the “Section 1260H” of US law, includes major players like Tencent Holdings, CATL, SenseTime, and several others.
While the immediate implications may be limited, the decision has far-reaching geopolitical and economic consequences, escalating tensions between the world’s two largest economies.
A Broader Effort to Protect National Security
The CMC list is part of Washington’s broader strategy to restrict the flow of sensitive technologies, such as semiconductors and artificial intelligence, to Chinese firms perceived as threats to US national security.
The list prohibits the US Department of Defense from engaging with these companies starting June 2026, as outlined in the National Defense Authorization Act of 2024.
However, the implications extend far beyond defense procurement, serving as a stark warning to American entities about the risks of conducting business with companies linked to China’s defense industry.
This latest update includes high-profile firms across diverse sectors, such as Tencent, the world’s largest gaming company and operator of the ubiquitous WeChat platform; CATL, the world’s leading electric vehicle (EV) battery manufacturer; and SenseTime, a global leader in artificial intelligence.
Other notable additions include COSCO Shipping, China’s largest shipping company, and MGI Tech, a genomic sequencing firm.
Corporate and Market Repercussions
The inclusion of these companies on the CMC list has obviously sent shockwaves through financial markets.
Tencent’s Hong Kong-listed shares have already started to plummet by 7.3 percent, according to Reuters on Tuesday, wiping out $35.4 billion in market value, while CATL’s stock dropped 2.8 percent, losing $4.4 billion.
Similar declines were seen across other newly listed firms, such as Quectel Wireless and COSCO Shipping.
Affected companies have strongly denied the allegations, with Tencent labeling its inclusion a “mistake” and vowing to initiate a reconsideration process or pursue legal action.
“We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding,” a Tencent spokesperson said, cited by Anadolu News Agency.
CATL echoed this sentiment, asserting that it has “never engaged in any military-related business.”
Despite these reassurances, the reputational damage for these firms, particularly in global markets, could be significant.
Analysts suggest that legal challenges could follow, citing Xiaomi’s successful 2021 removal from the list after a federal judge ruled that its inclusion was “deeply flawed.”
However, the addition to the CMC list signals a clear message from the US government that the scope of technologies considered sensitive is expanding, and the regulatory framework around them is becoming more stringent.
China’s Response and Rising Geopolitical Tensions
China has condemned the US decision, calling it discriminatory and an unjustified abuse of national security concerns.
During a press briefing, Chinese Ministry of Foreign Affairs spokesperson Guo Jiakun urged the US to “immediately correct its wrong practices” and lift the “illegal unilateral sanctions.”
He accused Washington of suppressing Chinese companies under various pretexts, hindering China’s technological and economic development.
Implications for US-China Relations
The updated CMC list further strains an already fraught relationship between the US and China.
By targeting prominent Chinese firms, the US sends a clear signal about its intent to protect critical technologies from potential exploitation by China’s military-industrial complex.
Yet, this aggressive approach risks deepening divisions between the two economic powerhouses, potentially disrupting global trade and investment flows.
The inclusion of CATL is particularly controversial, given its pivotal role in the global electric vehicle industry.
US automaker Ford, for instance, is building a battery plant in Michigan using CATL’s technology, a collaboration that has drawn criticism from lawmakers concerned about Chinese influence in critical supply chains.
A Warning to American Businesses
Experts caution that the CMC designations serve as a warning to American businesses about the risks of engaging with an expanding list of Chinese firms.
Craig Singleton, a China expert at the Foundation for Defense of Democracies, emphasized that “the garden of sensitive technologies is growing, and the fence protecting them is being fortified,” quoted by Reuters.
The US is no longer focused on safeguarding a narrow set of technologies; instead, it is broadening its defense perimeter to encompass a wider range of sectors deemed strategically important.
Final Thoughts On The Matter
The US Defense Department’s decision to expand the CMC list reflects an evolving national security landscape where economic and technological competition are front and center.
While affected companies, including Tencent and CATL, are likely to pursue legal and diplomatic avenues to challenge their inclusion, the broader implications of this move will continue to reverberate through international markets and diplomatic channels.
For the US, the move is part of a long-term strategy to counter China’s technological rise and military modernization. For China, it is yet another point of contention in an increasingly adversarial relationship with Washington.
The Department of Defense’s updated CMC list is available here.
