It has been reported that the United States has added Tencent Holdings Ltd. to a blacklist identifying companies as having ties to the Chinese military. This story was shared by Bloomberg, and as the revelation broke online, Tencent’s shares declined. Tencent was joined by CATL, a tech manufacturer linked with Tesla.
Tencent is China’s most valuable company and has a reach that covers some of the biggest video game companies on the planet, such as Epic Games, Activision Blizzard, Ubisoft, Riot Games, and SuperCell.
Pentagon Warning
The ‘blacklist’, backed by the Pentagon, indicates whether a company is inherently linked to China’s military or the nation’s ‘defence industrial base’. In Bloomberg’s recent report, it was written:
It’s unclear whether either company deals regularly with the PLA. Beyond direct ties to the government, US officials have pointed to laws that require Chinese companies to share information with Beijing on matters deemed relevant to national security.
Tencent’s stock value took a dive as the Pentagon’s designation hit the airwaves. It was followed up by a statement from Tencent’s representatives:
We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business.
It was suggested by the BBC that the Pentagon had been ‘pressured’ to add more Chinese companies to the blacklist, which is how CATL, a company that contributes to the manufacture of electric cars, ended up on the list.
Historically, companies have challenged the Pentagon’s decisions regarding this damning blacklist. For instance, DJI and Hesai Technologies took the intelligence agency to court but at the time of publishing, both remain on the list. In 2021, Xiaomi successfully petitioned for a removal from the blacklist.
The Department of Defense-backed list now features a whopping 134 Chinese companies, and that number is growing.
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These companies will die without Tencent. If you’re a streamer leave the US honestly move to Europe.
NetEase? Disney? Legendary Pictures? WBD? From Software? Kadokawa?Nexon? Hoyoverse? Leyou? Either CCP or invested in by CCP companies like Tencent.
UMG and WMG both have Tencent ownership they going to kill the music industry?