Jan 7 (Reuters) - Chinese wireless chips maker Quectel

Wireless Solutions will challenge its inclusion in a

U.S. list of companies allegedly aiding Beijing's military, the

company said on Tuesday.

The U.S. Defense Department on Monday added Quectel, WeChat

parent Tencent Holdings ( TCTZF ) and battery maker CATL

, among others, to a list of companies it says work

with China's military, in a move that could escalate tensions

between the world's two largest economies.

"We will take appropriate action to protect ourselves and

our stakeholders. We are confident that we will be removed from

the 1260H list," Quectel president and CSO Norbert Muhrer said.

A company spokesperson said on Monday Quectel "does not work

with the military in any country and will ask the Pentagon to

reconsider its designation, which clearly has been made in

error."