The Pentagon decided that Alibaba, Baidu, and BYD should be added to a US list of companies that support the Chinese military, according to a letter sent to Congress. Deputy Defense Secretary Stephen Feinberg sent the letter on October 7 to the heads of the House and Senate Armed Services Committees.
This list, called the 1260H list, warns US investors about companies linked to the Chinese military. Being on it doesn’t directly punish companies, but it is a big warning, as per the report by Bloomberg. Feinberg said the three companies plus five others — Eoptolink, Hua Hong Semiconductor, RoboSense, WuXi AppTec, and Zhongji Innolight — should be added to the list.
US-China military list
The letter was written before the Oct. 30 Trump-Xi summit in South Korea, where they agreed on lower tariffs and to pause some export controls. A Pentagon spokesperson did not respond to Bloomberg’s request for comment.
Alibaba said there is “no basis” for adding them to the list. They said, “Alibaba is not a Chinese military company nor part of any military-civil fusion strategy, as reported by Bloomberg. We further note that, because Alibaba does not do business related to US military procurement, being on the Section 1260H List would not affect our ability to conduct business as usual in the United States or anywhere in the world.”
Baidu said their products are for civilian use and called the US claim “entirely baseless”:“There is no credible basis for adding Baidu to the 1260H list or any other US government list of restricted companies. The suggestion that Baidu has military connections is entirely baseless and no evidence has been produced that would prove otherwise.”
The other Chinese companies named did not immediately respond to requests for comment. China’s Foreign Ministry said the US is overusing national security claims and suppressing Chinese companies unfairly. They added:“We urge the US to immediately correct its erroneous actions, and will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”
Impact on business and stocks
When some Chinese companies were added to the list in January, stocks like Tencent and CATL fell. Inclusion can be a serious problem for Alibaba, especially as it grows in AI. Earlier this month, a White House memo claimed Alibaba helped the Chinese military against US targets. Alibaba rejected this, calling it, “completely false” and a “malicious PR operation” designed “to undermine President Trump’s recent trade deal with China.”Innolight and Eoptolink make optical parts used to connect AI chips, and Nvidia calls them partners. RoboSense makes sensors for self-driving cars and robotics, also a Nvidia partner. The list was first published in 2021 and now has over 130 companies, including airlines, construction, shipping, computer hardware, and communications firms.
The law firm Hogan and Lovells said that being on the list can limit US defense contracts, lead to inclusion on other restricted lists, hurt a company’s reputation, and increase compliance costs.
FAQs
Q1. Why did the Pentagon add Alibaba, Baidu, and BYD to the 1260H list?
The Pentagon said these companies are linked to the Chinese military and should be warned to US investors.
Q2. What happens if a company is on the 1260H list?
Being on the list can hurt reputation, limit US defense contracts, and increase compliance costs.
