The move to add Chinese companies to the so-called 1260H list might strain the relationship between the two countries, just as Washington and Beijing eased trade tensions, improving ties to some extent
The Pentagon has said in its report that China’s BYD and Alibaba allegedly have connections to the People’s Liberation Army (PLA). The declaration comes just two months before US President Donald Trump is expected to visit China and meet his counterpart, Xi Jinping.
On Friday, the defence department sent its updated list of “Chinese Military Companies” to the Federal Register. Reports had earlier indicated that the e-commerce giant Alibaba was under the US intelligence’s scanner for having links with the Chinese military.
The move to add Chinese companies to the so-called 1260H list might strain the relationship between the two countries, just as Washington and Beijing eased trade tensions, improving ties to some extent.
Which companies are on the list?
The 1260H list, mandated by the US Congress, will see the addition of big giants like BYD, the EV-maker, and Baidu, the Chinese search engine.
When the Pentagon labels a firm as a “Chinese Military Company,” it indicates that U.S. officials assess the entity to have direct links to the People’s Liberation Army or to be participating in China’s military-civil fusion program, under which companies are obligated to share certain technologies with the Chinese military.
While the inclusion of the Chinese companies does not call for legal action, it puts a spot on their reputation as it indicates that the US might take punitive actions against them in the future, which might be bad for business.
Xi-Trump phone call
Earlier this month, Xi called for “mutual respect” in strengthening relations with the United States, while warning Trump to exercise “caution” over arms sales to Taiwan, according to China’s state media.
During a phone conversation with Trump, Xi said both sides should manage differences carefully and work to build stable ties between the world’s two largest economies.
He also expressed hope that bilateral challenges, including trade-related issues, could be resolved constructively and amicably.
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