US now considers Tencent and battery maker CATL to be too close to the Chinese military

It's not just TikTok! Tencent and CATL have a closer connection to the Chinese military than one could've predicted, the US Defense Department alleges.

Tencent (known for WeChat, a ubiquitous messaging and social media platform in China) and CATL (a big name in EV and smartphone battery technology) found themselves at the center of yet another round of US-China tensions, Reuters reports.

The US Defense Department added Tencent and CATL to its "Section 1260H list", citing links to China's military. This designation, which includes 134 companies, underscores escalating scrutiny of Chinese entities.

Although there are no immediate restrictions on operations, the move raises concerns about the reputation of these companies and warns US businesses to be more cautious when working with them. A sort of wink, if you like. Tencent's shares dropped over 7%, while CATL saw a nearly 3% decline in stock value following the announcement.

Both companies dismissed the claims, naturally. Tencent labeled its inclusion as an error, stating it would pursue legal remedies. Similarly, CATL denied any military involvement, emphasizing its focus on civilian technologies. Other newly listed companies, including chip maker Changxin Memory Technologies and drone producer Autel Robotics, also expressed discontent or remained silent.

The Chinese government called for an end to "illegal unilateral sanctions", asserting it would defend its companies' interests. Analysts suggested that Tencent might achieve exclusion through legal channels but cautioned about potential reputational fallout. Meanwhile, entities like Ford, which relies on CATL's battery technology for a Michigan plant, face scrutiny over such partnerships.

By the way, CATL's phone batteries are pretty amazing. They developed something called the Glacier Battery technology in partnership with OnePlus (and Oppo, given that Oppo and OnePlus are joined at the hip) for the OnePlus Ace 3 Pro.

This advanced battery technology is promising better longevity by staying cool under use (instead of getting hot).