Alibaba, Baidu, BYD named on Pentagon’s China military list

Pentagon, including a number of Chinese companies Alibaba Group, Baidu Inc. and car manufacturer BYDA list of organizations believed to be aiding the Chinese military is complicating the fragile diplomatic relationship between Washington and Beijing.

The Ministry of Defense published an updated report “1260H list” in the USA on Monday evening – A list of companies the Pentagon considers tied to China’s military or defense industrial base.

The definitions do not contain explicit sanctions, but mean the Ministry of Defense will be prohibited from contracting directly with listed companies from later this month and from supplying their products or services through third parties from June 2027.

“These indirect restrictions could force some US firms working with the US military to drop designated Chinese firms as suppliers,” said Michael Hirson, head of China Research at 22V Research.

Baidu’s American depositary receipts fell 2.1%, Alibaba fell 0.8% and BYD dropped 0.8%.

The additions come after President Donald Trump met with Chinese leader Xi Jinping in Beijing last month; where the two leaders agreed to a trade ceasefire and announced the establishment of a joint investment and trade board. The update underscores a recurring strain in bilateral relations and security concerns in Washington over Chinese technology being viewed as a strategic threat.

The Pentagon briefly released a similar expanded list in February, then withdrew it without explanation because Trump’s trip to China was pending. The release released Monday largely mirrors the February update, but reinstates Chinese memory chip makers CXMT and YMTC, which were left off the withdrawn list; It was an omission that sparked criticism from China hawks in Washington at the time.

According to the Ministry of Defense’s announcement, listed companies are considered to be affiliated with China’s State Assets Supervision and Administration Commission and are designated as companies that contribute to “military-civilian fusion” to China’s defense industrial base through their ties with the Ministry of Industry and Information Technology.

The list also includes biotech giant WuXi AppTec, lidar maker RoboSense Technology and China’s leading humanoid robot maker Unitree. US chipmaker Nvidia last week announced plans to work with the company to develop robots for research purposes.

The breadth of additions reflects Washington’s view that civilian technology companies in China are inextricably linked to the state’s military priorities; This underscores concern about restrictions on China’s semiconductors, AI hardware and advanced manufacturing from Washington.

The move is largely symbolic, Hirson said, as it falls short of an investment or export blacklist, but shows how broadly Washington draws the line around sensitive Chinese technology, which includes consumer electronics, biotechnology and robotics.

Still, Hirson said he does not expect the U.S. Treasury or Commerce Department to add more formal restrictions on major Chinese tech firms this year as Washington prioritizes keeping bilateral relations on a stable footing.

WuXi AppTec, Alibaba and Baidu objected to the designation and vowed to demand their removal. BYD did not respond to requests for comment.

“There is no basis to conclude that Alibaba should be placed on the Section 1260H List. Alibaba is not a Chinese military company or part of any military-civilian fusion strategy. We will take all available legal action against any attempt to misrepresent our company,” the company said in a statement to CNBC. he said.

Baidu also denied the claim and said it “will not hesitate to use all options at our disposal to delist the company.”

Some Chinese companies sued the Pentagon to challenge the listing, and Xiaomi won the case. resulted in removal In May 2021.