Pentagon blacklists Alibaba, BYD over ties to Chinese military
What's the story
The Pentagon has added Alibaba, Baidu, and BYD to its list of companies allegedly aiding the Chinese military. The updated list also includes other major Chinese tech firms crucial to Beijing's military and industrial capabilities. The decision reflects Washington's security concerns amid fierce geopolitical competition with China.
Business impact
Companies on Pentagon list can still operate in US
The Pentagon's list, created in 2021, identifies Chinese firms with ties to the military. This includes not just those directly controlled by China's armed forces but also those contributing to its defense industrial base. The latest update has expanded the list from about 130 last year to 188 this year. Companies on this list can still operate in the US, but they risk reputational damage and may face additional restrictions.
Rebuttals
Response from the companies
Alibaba and Baidu have denied their inclusion on the Pentagon's list, claiming there's no basis for it. Alibaba stressed that it is not a Chinese military company nor part of any military-civil fusion strategy. Baidu called the suggestion that it is a military company "entirely baseless," adding that they will use all available options to challenge this designation.
Legislative response
House committee's recommendations on US companies dealing with listed firms
The House Select Committee on the Chinese Communist Party has called the updated list "a warning to American businesses, all levels of government, and the American people." It has urged that companies listed and publicly traded on US exchanges should be delisted. The committee also advised against any American company doing business with those on this list, saying such actions would contribute to China's military rise.
Diplomatic fallout
China's response to US actions
In response to the Pentagon's updated list, China's embassy in Washington condemned the US for "overstretching the concept of national security and making discriminatory lists to go after Chinese companies." The embassy stressed that Chinese companies abide by local laws and regulations where they operate. It further called on the US to stop its wrong practices and create a fair, just, non-discriminatory environment for Chinese businesses.