The United States has placed some of China's biggest companies on a Pentagon blacklist, accusing them of ties to the Chinese military – a move that risks inflaming tensions between Washington and Beijing just as global trade rivalries deepen.
Alibaba, the e-commerce giant, and BYD, the world’s top electric vehicle maker, were among the firms named on the Department of Defense’s “Section 1260H” list on Monday, alongside tech giant Baidu, electric car maker Nio and aircraft manufacturer Comac. The list, which now totals 188 “Chinese military companies”, is designed to alert American organisations to the risks of doing business with the flagged firms. Inclusion does not trigger immediate sanctions, but it signals heightened scrutiny.
“US adds Alibaba and BYD to Pentagon list of Chinese military-linked firms, risking trade tensions.”
The Chinese embassy in the US condemned the move as “discriminatory”, insisting that Chinese firms have “strictly complied with the laws abroad”. Beijing will likely view the action as “a form of economic containment”, said policy analyst Stefanie Kam of Nanyang Technological University. She warned that China could retaliate with tit-for-tat sanctions, add American companies to a similar list, or mount diplomatic pushback.
Alibaba hit back hard. “We are not a Chinese military company nor part of any military-civil fusion strategy,” a spokesperson said. “We will take all available legal action against attempts to misrepresent our company.” Baidu also denied the allegations, with a spokesperson saying there was “no credible justification” for its inclusion and that it would “use all options available” to have its name removed.
BYD, which does not export its cars to the US, earlier this year surpassed Tesla to become the world’s top EV maker. The Pentagon has flagged these companies for their participation in state programmes rather than clear evidence of contracts with the Chinese military, Kam noted. The list also retains previously named firms such as Tencent, Huawei, drone producer DJI and battery maker CATL.
The escalation follows Washington’s 2019 ban on US firms doing business with Huawei, citing national security concerns. With American and Chinese companies now competing head-on in industries from electric vehicles to artificial intelligence, the stage is set for further confrontation – and the question is whether Beijing will respond with measures of its own.