The Pentagon has added Chinese tech giant Alibaba, electric vehicle (EV) titan BYD, and search engine Baidu to its list of companies that cannot secure U.S. defense contracts because they are linked to the Chinese military.
The Department of War began maintaining a list of “Chinese military companies” in 2021 known as the 1260H list, named after the section of the defense authorization act that created it. Companies on the list are known to provide services to the People’s Liberation Army (PLA), although they are not explicitly state-owned firms.
The list is supposed to map out the extensive coordination between China’s military complex and private companies, and caution American companies that doing business with named companies could risk their physical or intellectual property to end up in the hands of the PLA.
The new additions, made on Monday, brought the 1260H list up to 188 companies, from 130 last year. Although companies on the list are not automatically subjected to punitive sanctions, the Chinese government considers the 1260H list to be anti-competitive and unfair – more of an effort to “contain” China’s growing industrial sector than to address real security threats.
On Monday the Chinese Embassy to the United States accused the Pentagon of “overstretching the concept of national security and making discriminatory lists to go after Chinese companies.”
“The U.S. should stop its wrong practice and create a fair, just and non-discriminatory environment for Chinese companies,” the embassy said.
Alibaba released its own statement insisting that it is “not a Chinese military company, nor part of any military-civil fusion strategy.”
“We will take all available legal action against attempts to misrepresent our company,” an Alibaba spokesman said.
The Pentagon noted that Alibaba, BYD, and Baidu are all affiliated with the Chinese Communist government’s Ministry of Industry and Information Technology. Another firm, robotics company Unitree, made the list because it “knowingly received assistance” from the Chinese state.
Fortune noted on Monday that all three of China’s top artificial intelligence (A.I.) companies – Alibaba, Baidu, and Tencent Holdings – are now 1260H listed entities.
Two chipmakers that were seemingly removed from the list this year, ChangXin Memory Technologies and Yangtze Memory Technologies, have been restored. When they vanished from the list in February, some critics said the Trump administration was attempting to placate China ahead of President Donald Trump’s meeting with dictator Xi Jinping.
Rep. John Moolenaar (R-MI), chair of the House Select Committee on China, said Monday that not only was the 1260H list necessary and appropriate, but even stronger action should be taken against companies that appear on it.
“These Chinese companies are working with the Chinese military against our national interests,” he said. “Any of them that are publicly traded on U.S. exchanges should be immediately delisted and their products should be removed from supply chains our country depends on.”
Moolenaar added, “American companies must stop doing business with these threats to our national security; otherwise they are enabling China’s military ascendance.”