Tencent shares plunge after US adds company to Chinese military blacklist

The United States has blacklisted Tencent Holdings and Contemporary Amperex Technology Co Ltd (CATL) for alleged links to the Chinese military, targeting the world's biggest gaming publisher and top electric-vehicle battery maker in a surprise move weeks before President-elect Donald Trump takes office.

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CATL, a major supplier to Tesla, joined Tencent on a federal register of entities deemed to have ties with the People's Liberation Army (PLA). Both companies protested, saying their inclusion was a mistake and that they have no ties with the military.

Tencent's stock slid more than 7 per cent in Hong Kong, notching its biggest drop since October. CATL's shares fell about 3 per cent.

The blacklisting threatens to further escalate tensions between the world's two largest economies. While the Pentagon's blacklist carries no specific sanctions, it discourages US firms from dealing with its members.

CATL supplies not just Tesla, but also many of the world's biggest vehicle makers, from Stellantis to Volkswagen. Its inclusion threatens to disrupt that ecosystem just as the US and EU are sounding the alarm about China's growing dominance in a key industrial sector.

The Pentagon also named SenseTime Group and Changxin Memory Technologies, singling out a Chinese maker of memory chips considered crucial to Beijing's semiconductor and AI development endeavors. And the agency added oil major CNOOC and Cosco Shipping Holdings, both of which had been previously targeted by Washington. Cosco shares fell as much as 4.4 per cent in Hong Kong, while CNOOC was down as much as 1.6 per cent.