The US Department of Defense concluded that Alibaba Group Holding Ltd (阿里巴巴), Baidu Inc (百度) and BYD Co (比亞迪) should be added to a list of companies that aid the Chinese military, according to a letter to the US Congress sent about three weeks before US President Donald Trump and Chinese President Xi Jinping (習近平) agreed to a broad trade truce.
US Deputy Secretary of Defense Stephen Feinberg informed lawmakers of the conclusion in the Oct. 7 letter, a copy of which was seen by Bloomberg News, to the heads of the US House and Senate Armed Services Committees.
It was not clear whether the companies have been formally included in the Pentagon’s so-called 1260H list, which carries no direct legal repercussions, but serves as a major warning to US investors.
Photo: AP
Feinberg said the three companies, along with five others — Eoptolink Technology Inc (新易盛通信技術), Hua Hong Semiconductor Ltd (華虹半導體), RoboSense Technology Co (速騰聚創科技), WuXi AppTec Co (無錫藥明康德) and Zhongji Innolight Co (中際旭創) — merit inclusion on the 1260H list, which identifies businesses connected to the Chinese military operating in the US.
The list is published annually, and the most recent version, which was updated in January before Trump took office, does not include them.
“In our review of the latest information available, the Department has identified eight entities that it has determined are ‘Chinese military companies’ in accordance with the statute that should be added to the 1260H list,” Feinberg wrote in the letter.
Inclusion on the list could amount to a serious challenge for Alibaba, which is stepping up efforts to compete globally in artificial intelligence (AI), as well as the other firms.
In a statement, Alibaba said there was “no basis” for its inclusion on the list.
“Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” the company said. “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 that its products were designed for civilian use.
“There is no credible basis for adding Baidu to the 1260H list or any other US government list of restricted companies,” it said in a statement. “The suggestion that Baidu has military connections is entirely baseless and no evidence has been produced that would prove otherwise.”
Representatives for the other Chinese companies named in the letter did not immediately respond to requests for comment.
The list, first published in 2021, now includes more than 130 entities accused of working with the Chinese military. The names include those of airlines, construction companies, shipping companies, computer hardware manufacturers and communications companies.
Analysis by the law firm Hogan Lovells said inclusion on the 1260H List has “several direct and indirect implications,” including restrictions on US defense contracts, potential inclusion on other restricted party lists, reputational damage and increased compliance costs.
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