Tencent Responds to Military Allegations

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Tencent, a significant Chinese tech firm recognized for its ownership of Riot Games (the creators of ‘League of Legends’), has been included in an American government list that flags businesses thought to have connections with the Chinese military. This list, prepared by the Pentagon, acts as a warning for U.S. corporations about possible risks when dealing with such companies.

In response, Tencent clarified that they are not a military company or supplier. They plan to hold discussions with the U.S. Department of Defense to address any misconceptions about their nature. If these conversations don’t result in their removal from the list, Tencent is contemplating taking legal action to safeguard its interests.

Being added to this list doesn’t trigger sanctions right away, but it indicates potential future limitations. After the announcement, Tencent’s stock decreased by up to 7%, indicating investor unease. This action is a continuation of the ongoing strife between the U.S. and China, particularly in the technology sector.

Companies similar to CATL, a prominent electric vehicle battery manufacturer, have also been included on this list and have refuted any ties to military activities. Both Tencent and CATL are investigating potential legal remedies to contest their placement. The decision to include them recalls past instances where companies such as Xiaomi were removed from the list following legal disputes, in 2021 specifically.

The fact that Tencent holds significant investments in tech giants such as Epic Games and Activision Blizzard, along with its widely-used platform WeChat which serves almost 1.4 billion users monthly, makes this circumstance very interesting. It’s worth noting that WeChat was the subject of a U.S. ban attempt due to security issues in 2020; however, a federal judge halted the order on grounds of constitutional infringements.

The decision by the American government to include Tencent and other companies on a watchlist is perceived as a heightening of the technological competition between the two countries. This action could lead to these businesses encountering stricter sanctions, potentially being placed on an Entity List, which would curb their use of U.S. technology. Experts argue that Tencent has a solid argument for removal from this list due to the absence of compelling proof linking it to China’s military.

In light of the developing scenario, everyone will be keeping a close eye on Tencent’s actions aimed at restoring its reputation. This is particularly important given Tencent’s influential position within the worldwide technology sector and the possible repercussions for U.S.-China diplomatic ties.

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2025-01-07 16:13