The U.S. Department of Defense (Pentagon) has formally added Alibaba Group Holding Ltd. (NYSE: BABA / HKEX: 9988), BYD Co. Ltd. (OTC: BYDDY / HKEX: 1211) and Baidu Inc. (NASDAQ: BIDU / HKEX: 9888) to its updated Section 1260H Chinese Military Companies list, citing alleged links to the People’s Liberation Army (PLA) and China’s military-civil fusion strategy. The development comes less than two months before a planned meeting between former U.S. President Donald Trump and Chinese President Xi Jinping in Beijing, raising renewed questions over U.S.-China trade stability and national security risk exposure.
Pentagon Updates Chinese Military Companies List Amid Abrupt Removal
The US defense department recently submitted an updated version of its “Chinese Military Companies” list, also called the 1260H list, to the Federal Register. The list identifies Chinese companies that may have ties to the People’s Liberation Army (PLA). It also includes companies involved in China’s military-civil fusion program. This program requires private companies to share technology and expertise with the military.
In an unexpected move, the document was quickly removed from the Federal Register at the Pentagon’s request. No explanation was provided for the removal. Pentagon officials have said the revised list will be made public next week. Observers and companies are now awaiting clarification on the latest updates.
Being on the 1260H list does not automatically trigger legal penalties for most companies. However, it carries significant reputational risks and can signal that the US government may impose restrictions in the future. Inclusion often raises concerns among investors and business partners, as it suggests potential links to Chinese military activities.
Pentagon Adds Alibaba and BYD to Chinese Firms List
The inclusion of Alibaba, the global e-commerce giant, is one of the most high-profile updates. US intelligence agencies reportedly believe Alibaba may provide technical support for Chinese military operations and give the Chinese government access to sensitive customer data. The company has strongly rejected these claims, saying it is not part of any military strategy and plans to take legal action against misrepresentation.
Alongside Alibaba, the Pentagon will add BYD, the world’s largest electric car maker, and Baidu, China’s leading search engine, to the list. Both companies have denied any military involvement, calling the proposed designations “unfounded” and asserting that they do not participate in China’s military-civil fusion efforts.
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Other notable additions include WuXi AppTec, a biotechnology company, and RoboSense, a maker of AI-powered robotics, which the Pentagon says contribute to China’s military-industrial base. BOE Technology, a manufacturer of display panels for computers and smartphones, is also added after a recommendation from US lawmakers.
Interestingly, the Pentagon removed two Chinese memory chipmakers, CXMT and YMTC, from the list. Analysts have expressed surprise, noting that China’s commitment to military-civil fusion has not changed, and the reasons for their removal remain unclear. This move could improve the reputation of these chipmakers and potentially increase their sales to US customers.
Tensions Rise Ahead of Trump-Xi Meeting
The timing of these additions is significant. US-China trade tensions had eased following a meeting between Trump and Xi in South Korea last October. Yet adding these well-known Chinese companies to the 1260H list just weeks before the upcoming summit may create fresh friction.
Experts say the move demonstrates a careful balancing act: stabilizing trade talks while maintaining pressure in national security areas. While Beijing is expected to be displeased, analysts believe it is unlikely to derail the summit. Chinese officials may express concern about the “atmosphere” of negotiations, but they are likely to focus on securing favorable outcomes rather than withdrawing from discussions.
The Pentagon has not publicly shared detailed evidence for why the companies were added. However, lawmakers have previously urged the inclusion of certain firms, such as WuXi AppTec and BOE Technology, citing links to the PLA.
Companies affected by the list may face restrictions under US law. For example, the Biosecure Act, passed in December, limits the federal government’s ability to conduct business with certain biotechnology companies identified as security concerns.
Alibaba, Baidu, and BYD have all issued statements rejecting the Pentagon’s claims. They assert that their operations are civilian-focused and do not support military activities. The companies have also warned that they will use all available options to challenge any designation.
