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The Pentagon accused some of China\u2019s biggest companies including Alibaba Group Holding Ltd., Baidu Inc. and BYD Co. of supporting the Chinese military, doubling down on an earlier decision to label crown jewels of the country\u2019s corporate world as threats to US national security.<\/p>\n
The Defense Department\u00a0announced\u00a0the designations Monday in an update to a roster of companies that it has determined aid the People\u2019s Liberation Army. The companies were included in a previous version that was\u00a0posted briefly\u00a0in February before being withdrawn minutes later without any explanation, sowing confusion about the Pentagon\u2019s intentions.\u00a0<\/p>\n
With the move, the US has now declared that three of China\u2019s most prominent artificial intelligence champions \u2014 Alibaba, Baidu and Tencent Holdings Ltd. \u2014 are aiding the Asian country\u2019s armed forces. Tencent was added to the list in 2025 and has been seeking its removal. The designation of BYD, meanwhile, targets China\u2019s top electric-vehicle company. \u00a0<\/p>\n
American depositary receipts in Alibaba fell 1% to $119.84 at 3:40 p.m. New York time. Those of Baidu were down 2.1% at $119.14. BYD\u2019s receipts fell 0.7%.\u00a0<\/p>\n
Read More:\u00a0US Briefly Names Alibaba, Baidu as Firms Aiding China\u2019s Military<\/p>\n
The newest version of the Pentagon\u2019s so-called 1260H list also restored two Chinese memory chipmakers \u2014 ChangXin Memory Technologies Inc. and Yangtze Memory Technologies Co. \u2014 that had been previously designated by the Pentagon but were removed from the version that briefly appeared in February.\u00a0<\/p>\n
While the list carries few immediate legal repercussions, the Pentagon is increasingly using it to restrict companies\u2019 abilities to contract with the US military or to receive research funding. A 1260H designation also serves as a warning to US investors, and is widely considered a red flag that can precede more punitive trade restrictions.\u00a0<\/p>\n
None of the companies immediately provided comment when contacted by Bloomberg News. Many have previously rejected US claims that they support the Chinese military.\u00a0<\/p>\n
The Chinese embassy in Washington had no immediate comment. Liu Pengyu, an embassy spokesman, said previously that \u201cChina urges the United States to immediately correct its wrong practices and provide a fair, just, and non-discriminatory business environment for Chinese companies.\u201d<\/p>\n
The list was released less than a month after President Donald Trump met with his Chinese counterpart Xi Jinping in Beijing, where the two leaders discussed some of the sticking points on trade between the world\u2019s two largest economies. Their closely watched summit failed to yield a significant easing in tensions over advanced technology, especially AI. \u00a0<\/p>\n
\u201cThe Pentagon\u2019s republished Chinese military companies list serves as a post-summit reality check,\u201d said Craig Singleton, senior China fellow at the Foundation for Defense of Democracies. \u201cThe Xi-Trump meeting did not pause competition; it clarified where competition will continue,\u201d said Singleton, who tracks the 1260H designations closely.<\/p>\n
Read More:\u00a0Frail Trump-Xi Truce Highlighted by Pentagon\u2019s Botched Blacklist<\/p>\n
In releasing its updated list, the Pentagon said the named entities qualify as \u201cChinese military companies\u201d operating directly or indirectly in the US based on their alleged activities \u201cproviding commercial services, manufacturing, producing, or exporting.\u201d<\/p>\n
Bloomberg News reported in May that the Pentagon\u2019s initial decision to remove YMTC and CXMT was the reason the list was quickly withdrawn in February. Trump national security officials thought that removing the chipmakers \u2014 especially ahead of the planned meeting between the US and Chinese leaders set at the time for late March \u2014 would incorrectly suggest that the US no longer considered them a threat, according to people familiar with the matter.\u00a0<\/p>\n
Officials also feared the move would strengthen the Chinese companies at the expense of Micron and two other major memory players from US ally South Korea: Samsung Electronics Co. and SK Hynix Inc., according to the people.<\/p>\n
Immediately after the list\u2019s publication, a senior White House official called the Pentagon to express displeasure that their concerns had been ignored, Bloomberg reported. Defense officials raced to get the list taken down just minutes after it had been posted.\u00a0<\/p>\n
The snafu gave companies a monthslong opportunity to press for further changes via a mix of lobbying and legal strategies. In the end, the version published in June was substantially similar to the version published in February and then withdrawn \u2014 except for the reinstatement of the two chipmakers.\u00a0<\/p>\n
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Congress first ordered the Defense Department to make a list of Chinese military companies operating in the US in 1999. The Pentagon finally began doing so more than two decades later, after lawmakers and the first Trump administration revived the issue.\u00a0<\/p>\n
Due to China\u2019s \u201cmilitary-civil fusion\u201d policy, under which Beijing mandates private-sector collaboration with the country\u2019s armed forces, the Pentagon could theoretically justify designating almost any Chinese company with a US presence.<\/p>\n
The version that was briefly published in February and essentially republished Monday is among the most significant updates in the list\u2019s history, targeting nearly 200 companies \u2014 many of them among China\u2019s most prominent. \u00a0<\/p>\n
John McEntee, a former senior Trump White House official who lobbies for Tencent, criticized the company\u2019s continued inclusion on the list.\u00a0<\/p>\n
\u201cBy expanding the list to Chinese car companies like BYD and NIO, they\u2019re revealing how ridiculous the justification is. By their logic, Ford and GM should be classified as American military companies,\u201d he said.<\/p>\n
Read More:\u00a0Wi-Fi Giant\u2019s US Future Hinges On Its Claimed Split From China<\/p>\n
One remaining point of confusion emerging from the newest update is the addition of China-based TP-Link Technologies Co. Ltd. \u2014 which is focused on selling routers to customers in China \u2014 rather than US-headquartered TP-Link Systems Inc., which has come under US scrutiny for the possible national security risks posed by its dominance in the market for wireless routers.<\/p>\n
To be added to the list, a company must operate directly or indirectly in the US.\u00a0<\/p>\n
\u201cAs a U.S.-based company incorporated in California, TP-Link Systems Inc. is not subject to this posting or its associated restrictions,\u201d said a company spokeswoman. She added that TP-Link\u2019s founder and CEO, Jeffrey Chao, lives in California \u201cand is not and never has been a member\u201d of the Chinese Communist Party.<\/p>\n<\/div>\n
#Pentagon #accuses #Alibaba #Baidu #BYD #Chinas #biggest #firms #supporting #military<\/p>\n","protected":false},"excerpt":{"rendered":"
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