The Pentagon has added major Chinese companies — including Alibaba Group, BYD and Baidu — to a list of firms it alleges are linked to China’s military.
The Pentagon has added several major Chinese firms — including Alibaba Group, BYD and Baidu — to a list of companies it says are linked to China’s military, as per a Bloomberg report.
The updated roster also names RoboSense Technology Co. and TP-Link Technologies Co..
Market reaction to US decision
Following the announcement, Alibaba’s American depositary receipts fell as much as 5 per cent in extended trading, while Baidu’s receipts declined 4.5 per cent.
Although inclusion on the Section 1260H list does not trigger immediate sanctions, it serves as a cautionary signal to investors and can carry reputational and commercial risks.
Companies push back
Alibaba rejected the designation, saying there was “no basis” for its inclusion and denying any role in China’s military or military-civil fusion strategy. The company added that it would pursue available legal remedies. Baidu did not immediately comment.
What is the 1260H list?
First published in 2021, the Section 1260H list identifies companies the US government alleges are connected to the Chinese military. It now includes more than 130 entities across sectors such as aviation, construction, shipping, hardware manufacturing and telecommunications.
According to Bloomberg, Deputy Defense Secretary Stephen Feinberg had informed congressional leaders in October that Alibaba, BYD and others would be added. An analysis by law firm Hogan Lovells said listing can have several direct and indirect effects, including limits on US defense contracts, potential addition to other restricted lists, reputational damage and higher compliance costs.
Diplomatic implications
The move may also add friction ahead of US President Donald Trump’s planned April visit to China, where he is expected to meet Chinese President Xi Jinping. Trade and technology issues — including possible exports of advanced chips from Nvidia — are likely to be on the agenda, with Alibaba among the firms that could seek access to such technology.
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