WASHINGTON — The Pentagon has expanded its list of companies it says are linked to China’s military, adding several of the country’s largest technology, manufacturing and industrial firms in a move that has drawn criticism from Beijing and affected a range of businesses operating globally.
The U.S. Department of Defense updated its so-called Section 1260H list this month, adding companies including Alibaba Group, Baidu, BYD and NIO, according to Pentagon documents and reports by Reuters. The updated list also includes semiconductor, biotechnology, robotics and renewable-energy companies that U.S. officials say are connected to China’s military-civil fusion strategy.
The designation does not impose immediate sanctions. However, under U.S. law, companies on the list face restrictions on direct and indirect Pentagon procurement beginning in 2027, and inclusion can increase scrutiny from investors, customers and government agencies.
The Pentagon said the list is intended to identify entities that it believes are operating in the United States while contributing to the modernization of China’s military. U.S. officials have increasingly argued that China’s commercial and technological sectors play a role in supporting military capabilities through shared research, manufacturing and technological development.
China strongly criticized the decision on Friday. The Chinese Commerce Ministry said it was “strongly dissatisfied” with the move and urged Washington to reverse what it described as discriminatory measures against Chinese firms. Chinese officials also argued that the action undermines recent efforts by the two countries to stabilize economic relations.
Several companies named on the list rejected the Pentagon’s assessment. Representatives for Alibaba, Baidu, BYD and other firms have said they do not have military affiliations and are reviewing legal and administrative options, according to company statements reported by Reuters and other media outlets.
The latest expansion follows earlier Pentagon actions. In January 2025, the Defense Department added major Chinese companies including Tencent Holdings and CATL to the same list, prompting denials from both firms and renewed debate over U.S.-China technology competition.
The updated roster now contains significantly more entities than previous versions, reflecting broader U.S. concerns about China's technological and industrial development. Lawmakers from both major U.S. political parties have supported closer scrutiny of Chinese companies involved in sectors such as artificial intelligence, semiconductors, electric vehicles and advanced manufacturing.
As of Friday, no additional sanctions had been announced against the newly listed companies. The Pentagon said firms may seek removal from the list through an established review process, while Chinese officials said they would continue to oppose what they described as unjustified restrictions on their companies.
