(Photo : Tencent / Screenshot taken from official website)
The United States Department of Defense added to its blacklist video game company Tencent over its alleged ties to the Chinese military.
Despite the development, Tencent being on the blacklist does not impose any form of sanctions or prevent the companies on it from trading in the American region. However, it was designed to discourage other firms from doing business with the blacklisted entities.
U.S. Adds Tencent to Blacklist
The blacklist in question was originally created after then-president Donald Trump issued an executive order in 2020. This prevented many companies in the United States from investing in firms that have supposed connections to the Chinese military.
In light of the news, Tencent representative Danny Marti issued a statement, noting that unlike sanctions or export controls, the blacklist has no impact on the company's business. He added that the firm will still cooperate with the U.S. Department of Defense to address any sort of misunderstanding.
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The situation comes as Tencent is a fairly large company and is the owner of several developers, including Grinding Gear Games, which is responsible for "Path of Exile 2." It also owns the parent company of Sumo Digital, Sumo Group, according to Push Square.
Tencent most notably owns Riot Games, which is the one behind the highly popular MOBA "League of Legends" and many of its spin-off titles. Additionally, the Chinese company has majority stakes in many European developers, such as Techland of "Dying Light" and Fatshark of "Warhammer 40,000: Darktide."
Alleged Ties to the Chinese Military
Other than Tencent, the United States Department of Defense also included on the blacklist CATL, which is the world's largest battery maker. Following the news, Tencent's shares were 6.5% lower in Hong Kong on Tuesday, while CATL's shares dropped by more than 3%.
The two companies join dozens of other firms that the U.S. Department of Defense alleged operate directly or indirectly in the U.S. that are connected to the Chinese military. The Pentagon noted that the list is updated every year, CNN said.
It also said that it is part of the continuing effort to highlight and counter China's so-called "military-civil fusion" strategy. The goal of this is to develop the most technologically advanced military in the world by removing barriers between the nation's civilian research and commercial sections with its armed forces.
Following the addition of Tencent and CATL to the Department of Defense's blacklist, it now contains 134 companies in total, according to Fox Business.
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