Chinese tech firms label Pentagon list as a 'clear mistake'

Chinese tech giants, including SenseTime, Tencent and CATL, referred to their inclusion on a US Defense Department list of "Chinese military companies" as a "mistake" and a "false designation" on Tuesday.

They said they would take measures, including legal action, to get off the list.

On Monday, China's leading Internet, battery, artificial intelligence, and shipping companies were among a list of companies that the Pentagon said it considers military.

Chinese foreign ministry spokesman Guo Jiakun told a regular press briefing on Tuesday that "China is always firmly opposed to the US side's generalization of the concept of national security, the establishment of various discriminatory lists, the unreasonable suppression of Chinese enterprises and the curbing of China's high-quality development."

The morning session saw a sharp decline in the shares of the firms, although the companies said that the impact of the US action would be minimal.

"CATL has never engaged in any military-related business or activities, so this designation by the Department of Defense is a mistake. It does not restrict CATL from conducting business with entities other than DoD and is expected to have no substantially adverse impact on our business," CATL, China's biggest automotive battery maker, said in a statement to Shanghai Daily.

CATL manufactures about one-third of the world's electric car batteries.

"Tencent's inclusion on this list is incorrect. We are not a military organization or a military supplier," Tencent said on Tuesday.

"This list, unlike export controls and others, has no bearing on our business. Nonetheless, we will collaborate with the appropriate US authorities to resolve the misunderstanding."

"This decision by the US Department of Defense has no factual basis, and we firmly disagree with it," SenseTime said in a communiqué.

The US Department of Defense prohibits organizations classified as "Chinese military companies" from dealing with them.

SenseTime, a major AI company in China, said that the US decision will have no impact on its global operations.

There are two methods to remove a company from the Pentagon's China Military Company list: administratively or through litigation, which involves filing a case in a US court.

Chinese companies such as Hesai, IDG Capital, Xiaomi and AMEC, a semiconductor equipment manufacturer, successfully removed themselves from the list through legal action.

On Tuesday, CATL said it would work with DoD to correct the incorrect decision, including taking legal action, to protect its shareholders.