Tensions spanning trade and geopolitics have escalated in recent years between the world's two top economies, which are now vying for supremacy in critical high-tech sectors.

Tencent and CATL were included on a list of Chinese military companies operating in the United States published on the US Federal Register.

The list does not have direct legal implications for the companies in question, but can affect their reputations, and listed firms have sued over their inclusion in the past.

Tencent's shares plummeted more than seven percent in Hong Kong on Tuesday, while CATL briefly sank more than five percent in Shenzhen before paring the losses.

Beijing blasted Washington's latest move as "unreasonable suppression of Chinese enterprises" and urged the US to "immediately correct its wrong practices".

"China is always firmly opposed to the US side's generalisation of the concept of national security," foreign ministry spokesman Guo Jiakun told a regular press briefing.

Tencent is one of the top players in China's expansive technology sector, operating the WeChat "super-app" with other offerings across gaming, content streaming and cloud services.

CATL is also a major firm, producing more than a third of the electric vehicle batteries sold in the world.

They have been used in models from a long line of foreign manufacturers including Mercedes-Benz, BMW, Volkswagen, Toyota, Honda and Hyundai.

- US decision a 'mistake' -

Tencent said it intends to engage in discussions with US authorities as part of a process "to correct this mistake".

It added that Tencent will "undertake legal proceedings" if necessary to remove itself from the list, in a statement published Tuesday on the Hong Kong Stock Exchange website.

CATL also said its inclusion on the list was a "mistake" and the company is "not engaged in any military related activities".

"We welcome responsible discourse on our business operations and take questions about our business seriously," it added in a statement.

The National Defense Authorization Act for fiscal year 2021 required the US defense secretary to identify Chinese military companies operating directly or indirectly in the United States and submit a list to Congress, with the unclassified portion of the list to be published on the Federal Register.

The United States considers China its primary rival, and Washington has for years rolled out measures targeting tech companies over national security concerns and fears that technology could be used by Beijing for military purposes.

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Tencent

Mercedes-Benz Group

BAYERISCHE MOTOREN WERKE AG

Volkswagen

TOYOTA MOTOR

HONDA MOTOR

Hyundai Motor Company

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