Pentagon expands list of China military-linked firms to include Alibaba, Baidu in fresh blow to diplomatic thaw

The Pentagon added a slew of Chinese companies, including Alibaba Group, Baidu Inc and carmaker BYD, to a list of entities it believes have aided the Chinese military, complicating the fragile diplomatic relationship between Washington and Beijing.

The Defense Department published an updated "1260H list" Monday evening stateside — a roster of companies the Pentagon considers affiliated with China's military or defense industrial base.

The designations do not impose sanctions explicitly, but mean the Defense Department will be prohibited from contracting directly with listed companies starting later this month, and from procuring their products or services through third parties beginning in 2027.

Baidu's American depositary receipts dropped 2.1%, Alibaba slumped 0.8% and BYD slid 0.8%.

The additions come after President Donald Trump met Chinese leader Xi Jinping in Beijing last month, where the two leaders agreed to a trade truce and announced a joint investment and trade board. The update underscores a recurring tension in the bilateral relationship and security concerns in Washington over Chinese technology as a strategic threat.

The Pentagon briefly posted a similar expanded list in February, then withdrew it without explanation as Trump's China trip had been pending. The version released Monday largely mirrors that February update, but reinstates Chinese memory chipmakers CXMT and YMTC, which had been left off the withdrawn list — an omission that drew criticism from China hawks in Washington at the time.

Listed companies are deemed affiliated with China's State-owned Assets Supervision and Administration Commission, and designated as "military-civil fusion" contributors to China's defense industrial base through ties to the Ministry of Industry and Information Technology, according to the Defense Department notice.

The list also adds biotech giant WuXi AppTec, lidar maker RoboSense Technology and Unitree — a leading Chinese maker of humanoid robots. U.S. chipmaker Nvidia announced last week its plans to work with the company to develop robots for research use.

The breadth of the additions reflects Washington's view that civilian technology companies in China are inextricably linked to state military priorities, underscoring a concern that has driven restrictions on China's semiconductors, artificial intelligence hardware and advanced manufacturing from Washington.

WuXi AppTec disputed the designation and said it would take immediate steps to seek its removal. Alibaba, Baidu and BYD didn't immediately respond to requests for comment.