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US expands list of Chinese firms tied to military
The Pentagon has designated 188 Chinese companies, including Alibaba and BYD, as entities with alleged connections to China's military, escalating economic tensions between Washington and Beijing.
No immediate sanctions, but risks flagged
Inclusion on the Section 1260H list, published Monday in the Federal Register, does not trigger sanctions but warns American businesses of potential national security risks. The move targets firms accused of supporting China's defense operations through civilian-military integration programs.
Chinese firms deny ties, Beijing calls list discriminatory
The Chinese Embassy in Washington condemned the designation as "discriminatory," asserting that Chinese companies comply with international laws. Alibaba, BYD, and Baidu-all named in the update-rejected the accusations.
"We are not a Chinese military company nor part of any military-civil fusion strategy," an Alibaba spokesperson said, vowing legal action against "misrepresentation."
Baidu called its inclusion "unjustified," while BYD and other listed firms, including Nio and Comac, had not responded to requests for comment by publication time.
Economic rivalry fuels tensions
Many of the designated firms compete with U.S. industries, particularly in electric vehicles and AI. BYD, the world's top EV maker, surpassed Tesla earlier this year, though it does not export cars to the U.S. Analysts warn the move could provoke retaliatory measures from Beijing, such as sanctions on American companies or diplomatic pushback.
"China may view this as economic containment," said Stefanie Kam, a policy analyst at Nanyang Technological University.
Precedent and broader implications
The list, first established under the Trump administration, has grown to include tech giants like Huawei and Tencent, as well as drone maker DJI and battery producer CATL. Huawei was barred from U.S. business in 2019 over security concerns, which the company denies.
Kam noted that the Pentagon's designations appear based on participation in state programs rather than direct military contracts, raising questions about the criteria's transparency.
What's next
Beijing's response remains uncertain, but past actions suggest potential countermeasures. The U.S. has not indicated plans to impose sanctions on the newly listed firms, leaving their operations unaffected for now.
