US adds Tencent, CATL to list of 'Chinese military companies'

The US Defence Department has added Chinese tech giant Tencent and battery manufacturer CATL to a list of companies it says are affiliated with Beijing's military.

Tencent's shares plummeted more than seven percent in Hong Kong on Tuesday, while CATL saw its shares in Shenzhen sink 5.2 percent.

The two firms were included on a list of Chinese military companies operating in the United States that is due to be published Tuesday on the US Federal Register, with copies available for download the day before.

Tencent is one of the top players in China's expansive technology sector, operating the WeChat "super-app" with other offerings across gaming, content streaming and cloud services.

CATL is also a major firm, producing more than a third of the electric vehicle batteries sold in the world.

They have been used in models from a long line of foreign manufacturers including Mercedes-Benz, BMW, Volkswagen, Toyota, Honda and Hyundai.

A spokesperson for Tencent said the company's inclusion on the list "is clearly a mistake," and that "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," the spokesperson added.

CATL also said in a statement that its inclusion on the list was a "mistake."

"CATL is not engaged in any military related activities," the firm said.

"We welcome responsible discourse on our business operations and take questions about our business seriously," it added.

The National Defense Authorization Act for fiscal year 2021 required the US defense secretary to identify Chinese military companies operating directly or indirectly in the United States and submit a list to Congress, with the unclassified portion of the list to be published on the Federal Register.

The list does not have direct legal implications for the companies in question, but can affect their reputations, and listed firms have sued over their inclusion in the past.

The United States considers China its primary rival, and Washington has for years rolled out measures targeting tech companies over national security concerns and fears that technology could be used by Beijing for military purposes.

Hong Kong's Hang Seng Index opened on Tuesday down nearly one percent.