US Defense Department Adds Alibaba, Baidu, BYD to Chinese Military Company List

File pic: Defense Secretary Pete Hegseth speaks to members of the media during a press briefing at the Pentagon. (AP Photo/Manuel Balce Ceneta)

America recently announced its list of companies designated as a “Chinese military company.” The Federal Notice is for Chinese military companies operating in the United States. In a Federal Register notice published this week, the US Department of Defence designated a broad group of Chinese companies as “Chinese military companies” under Section 1260H of the National Defence Authorisation Act. According to the notice, "The Deputy Secretary of Defense has determined that the following entities qualify for designation as “Chinese military companies,” are engaged in providing commercial services, manufacturing, producing, or exporting (as required by Section 1260H(g)(2)(B)(ii)), and operate directly or indirectly in the United States (as required by Section 1260H(a)) in accordance with section 1260H."

The Section 1260H designation does not impose immediate export controls or prohibit companies from doing business with US customers. What publishing of this list means is that staring June 30, the Pentagon will be barred from directly procuring products or services from the designated companies. Since most of the affected Chinese technology and manufacturing companies do not sell directly to the US military, analysts said the immediate operational impact was likely to be limited. The Pentagon’s roster has now expanded to 188 Chinese entities, up from 134 in the previous official revision. The latest additions to the list include sectors ranging from artificial intelligence (AI) and electric vehicles to robotics and biotechnology, including Alibaba Group, Baidu, BYD, WuXi AppTec, RoboSense and Unitree Robotics. Chinese memory-chip makers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co (YMTC) were also added. The pair had been briefly removed from the list in February. The update follows the addition of Tencent Holdings and battery giant CATL in January last year.

What Baidu and Alibaba said on the addition to the list

A Baidu spokesperson said in a statement to South China Post, “There is no credible justification for adding Baidu to the list.” He added, “The suggestion that Baidu is a military company is entirely baseless. We will not hesitate to use all options available to us to have the company removed.” Alibaba also disputed the designation, saying there was “no basis” for its inclusion on the list. “Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” an Alibaba spokesperson said. “We will take all available legal action against attempts to misrepresent our company.” In a filing to the Hong Kong stock exchange, WuXi AppTec said it had been “incorrectly” included on the list and reiterated that it was not owned, controlled or affiliated with any branch of the Chinese military.