U.S. Defense Department Includes Tencent Among ‘Chinese Military Corporations’

Tencent seeks to engage with the U.S. Department of Defense to correct what it describes as a “misunderstanding” that has led to its inclusion on a recently-released list of Chinese Military Enterprises (the CMC List) operating in the United States.

The Chinese technology and gaming giant, which owns prominent studios like League of Legends creator Riot Games and Clash of Clans developer Supercell, was added to the updated CMC List published earlier today.

The document was released on the Federal Register and acts as a “notification of Chinese military companies operating in the United States.”

In response to its addition in a report to investors, Tencent acknowledged the situation but emphasized that it is “neither a Chinese military company nor a contributor to the military-civil fusion within the Chinese defense industrial base.”

The company claimed its placement on the CMC List is a “misunderstanding” while noting that its business operations in the United States are unlikely to be affected by this action.

“Unlike other lists managed by the U.S. Government for sanctions or export control regulations, inclusion in the CMC List pertains solely to U.S. defense procurement, which does not impact the Group’s operations,” it stated.

“The CMC List is also separate from the Non-SDN Chinese Military-Industrial Complex List (NS-CMIC List) maintained by the U.S. Office of Foreign Assets Control, and being listed in the CMC List will not restrict any individuals (except for the Department of Defense) from engaging in business with the company, including trading in the company’s securities.”

Tencent intends to reach out to the Department of Defense to initiate a “reconsideration process” to rectify what it continues to assert is a mistake, but it is prepared to take a firm stance. “If necessary, [we] will pursue legal action to have the company removed from the CMC List,” it concluded.

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