The United States Department of War (Pentagon) has concluded that major Chinese technology companies, including e-commerce giant Alibaba, search engine Baidu, and electric vehicle manufacturer BYD, should be placed on a list of firms aiding the Chinese military, according to a letter sent to Congress, sources familiar with the matter confirmed Wednesday.
The assessment, which was reportedly transmitted to lawmakers in an October 7 letter by Deputy Defense Secretary Stephen Feinberg, recommends the inclusion of the companies on the Section 1260H list—a register of entities deemed to be “Chinese military companies” operating on U.S. soil.
While the designation carries no immediate legal penalties or sanctions, it functions as a critical public signal warning American investors and businesses about the risks of conducting transactions with firms that Washington believes are contributing to Beijing’s military objectives.
The decision has prompted strong diplomatic pushback from Beijing.
China’s Foreign Ministry stated that it “has consistently opposed the U.S. practice of overbroadly defining national security, establishing discriminatory lists under various pretexts, and unjustifiably suppressing Chinese enterprises.” The ministry urged Washington to “immediately correct its erroneous actions” and promised to “take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”
Alibaba, one of the world’s largest companies, was quick to reject the claims. A spokesperson for the company said there was “no basis to conclude that Alibaba should be placed on the Section 1260H List,” adding that the firm “is not a Chinese military company nor part of any military-civil fusion strategy.”
The Section 1260H list, which is updated annually, currently includes more than 130 entities. The Pentagon’s recent recommendation adds these three tech leaders along with five other companies specializing in robotics and semiconductors, further highlighting Washington’s expanding concern over China’s military-civil fusion strategy in the technology sector.
