The inclusion of Chinese companies on US blacklists is hardly new. But in recent years, the growing dominance of Chinese firms in sectors such as electric vehicle batteries and shipbuilding has attracted both significant foreign investment and attention that makes them particularly susceptible to US regulatory actions.

On Tuesday, the US Defense Department added CATL, the world’s largest EV battery maker, and Tencent, the largest game maker, to a blacklist for alleged links to the Chinese military. Shares in both dropped in response — in the case of Tencent more than 7 per cent in Hong Kong, highlighting investors’ sensitivity to rising geopolitical tensions and regulatory risks. But the sell-off should be shortlived.

Other companies on the Chinese military blacklist include chipmaker Changxin Memory Technologies and China’s largest shipping company Cosco Shipping Holdings, plus two local shipbuilders. Tencent and CATL have denied military ties and called the designation a mistake.