In the same month January 7, The US Department of Defense extended its list of firms that it says might have links with the Chinese military, and included some big names like Tencent which develops PUBG Mobile. This new step comes to the continuos attempts of the United States to limit Chinese companies considered as threats to domestic security. The decision also indicates that the U.S. government will further step up its suppression of China’s technology industry.
PUBG Maker Tencent Added to U.S. Ban List Amid Rising Tensions
This measure that has been undertaken by the United States stiffed some of the most significant firms in the last ten years; Huawei and ZTE among them. These companies have been barred from supplying overseas companies with American technologies to which they have gained access. These sanctions have had an impact on the market all over the world touching base from telecommunications to mobile games.
The inclusion of Tencent in the list shows how the relations between the US and Chinese technology companies are gradually straining. AYER Tencent’s PUBG Mobile game which received significant global adoption is one of the games that stood to lose a lot in this ban given that it would affect the firm and its overall access to the American market. Although Tencent has tried to position itself as an organization independent of the Chinese government, its outreach and engagement make it an ideal candidate for American officials to apprehend concerning national security.
In addition to Tencent, other Chinese firms such as SenseTime, a primary player of facial recognition technology and Contemporary Amperex Technology Co. Limited, an electric vehicle battery maker, were included on the list. These additions show the vast array of the US government war on Chinese technology and its relationship to its military. The decision to blacklist such a wide range of companies has enhanced the competition even in the technological area of the U.S-China relations.
As the ban list expands, threats and pressures remain intact, and companies such as TikTok or Huawei do not seem to escape them. With the government continuing to potentially ban the app for the final time, it thus becomes evident that the US has considered these companies as key contestants in the ongoing fight against China. The growth of the list proves the nature of the modern political process in the field of technologies and shows how it affects foreign trade and global security.
U.S. Expands List of Chinese Military-Affiliated Companies to 134
The U.S. Department of Defense lists Chinese companies with suspected ties to the military and has expanded to 134 from only 20 last year. It was developed in 2021 under the National Defense Authorization Act Section 1260H, which requires the annually updated list of businessmen deemed to have connections with the Chinese military or use civil technologies for military ends. , the move also reflects the U.S. government’s consistent approach to mitigate putative security threats posed by Chinese innovation.
Under the provisions of this law, the Department of Defense cannot do business with any firm on the list within five years of that company being placed on it. This timeline presents policy making of the United States to gradually eliminate Chinese companies that are seen as a threat to the country’s security. Although such a list has been compiled and is continuing to increase, more addition is anticipated to occur in the future years since the United States has not ceased to scrutinize Chinese firms for affiliation with the military.
Apart from those firms mentioned above such as Huawei and ZTE, new firms were included in this year’s list that include; Changxin Memory Technologies, Quectel Wireless, Autel Robotics, and COSCO. This list of corporations is diverse ranging from memory chips manufacture and drones and shipping industries so this shows that the apprehension of Chinese technology is now becoming more generalized. The drone industry in particular has been closely monitored especially due to its relationship with national security issues hence businesses under this line of business such as Autel Robotics shall be subjected to extra scrutiny.
The updates also raises the possibility of further actions against some of the companies with connections to the Chinese military. Congress and Supreme court hold the authority to either continue with the restrictions stated or even impose more or ban more such companies who are implicably linked to the Chinese military. The level of authority may result to more aggressive actions against Chinese firms, the actions that affect their operations in the US market.
Even as the list grows, the American authorities are still concerned with restricting the presences of companies considered to have some ties to the military. Each of these evidences suggests that technology is now central to security and continues to gain prominence as its application perpetually transforms global security paradigms. Emerging with 134 companies under the radar, this list might potentially affect scope of functioning and global affiliation of Chinese companies.
U.S. Ban Creates Immediate Challenges for Listed Chinese Companies
For the companies it means that soon after they were placed on the U.S. Department of Defense list of creepy companies, there are actions taken against them. Share prices always decline, as it was the case with Tencent whose value plunged by 7.3% after inclusion. Despite it serving the primary purpose of safeguarding American data and security, the ban results in an instant financial impact on the firms in question.
Needless to say, Tencent initiated steps towards deletion of the name from the list, which also reflects the party’s intention to resolve the matter. Even though the stock has dived, Evan Su, an analyst at Morningstar, opines that the firm’s gaming revenues will stay steady in the near term, which should mean it can absorb the first hit.
But the effects of the ban would not be limited to the companies. Companies in the United States, especially those that use Chinese technology in production and in products that needs advanced industry like the batteries of electric vehicles, are now in trouble. Indeed, Ford’s now threatened battery partnership with CATL in China is a local example of how the ban threatens cross-border investment relationships and potential new projects.
Legal Battles Emerge as Companies Contest U.S. Ban
As a result of their placement on the U.S blacklist , many affected firms such as Tencent have sailed to the Pentagon courts. Some of these companies have complained that they are on that list unfairly and have taken legal action to be removed. Nonetheless, most legal cases of this kind are protracted and sometimes may span several years.
DJI, the popular drone company, also lodged a legal complaint when it was included in the list last year. To battle the allegations of having links with military, the company decided to sue the U.S government. DJI’s case is an example of an increasing move by Chinese firms to challenge such decisions in courts.
Despite the legal battles yet to be resolved, the real impact of the ban stands in force. Restrictions on business with U.S. counterparts still remain in place affecting their operations in a number of markets. The decisions handed down in such cases may well mechanise precedents for other lawsuits dealing with foreign enterprises and issues of national security.
Could PUBG Mobile and Tencent Face a U.S. Ban?
Riot Games, which Tencent acquired has some of the most popular games in the world among them is Warframe, PUBG popularized by PUBG mobile, Crossfire which is now trending in Asia, Honor of Kings, and league of legends. It also invests in leading gaming firms for example Ubisoft among others. The global gaming market could suffer greatly from a potential ban of games developed by Tencent; the games have an especially large player base in the U.S.
If the U.S. were to follow through on this ban, it wouldn’t just apply to PUBG Mobile and other directly owned games by Tencent but would hit the industry as a whole. The ban could render Tencent’s games, and services contraband, affecting millions of Americans who indulge in such products. However, any such decision would be very disruptive, and might well be blocked anyway.
An elimination of Tencent would therefore need a lot of debate in parliament in terms of legislation, and one is therefore would take a long time to implement. Unlike the case of a complete ban on applications such as TikTok or the telecommunications firm Huawei, the ban on Tencent and its associated operations because of its multilevel and diverse business model and particularly because of its relation to the gaming industry would be long and cumbersome.
Tencent may also have the contend some of such restrictions violate its legal rights in the Chinese legal system. Like most other companies on the U.S. blacklist, Tencent would be in a position to challenge the ban through the legal system, which could in turn stall or even stop the ban from taking effect. As you will see, the last results are still ambiguous due to the multifaceted nature of the situation.