U.S. Department of Defense: "Alibaba, BYD Listed as Chinese Military Supporting Companies... YMTC and CXMT Remain on List"

Disadvantaged in Department of Defense Contracts and Procurement

China's Two Major Memory Makers, YMTC and CXMT, Also Included

The U.S. Department of Defense has included Chinese big tech companies Alibaba and Baidu, as well as electric vehicle manufacturer BYD, on its list of "Chinese military (People's Liberation Army) supporting companies." Major Chinese semiconductor companies Yangtze Memory Technologies (YMTC) and ChangXin Memory Technologies (CXMT) have also been added to the list.

On June 8 (local time), the Department of Defense announced in a press release that it had published an updated list in the Federal Register of Chinese military companies operating directly or indirectly in the United States. This action was taken in accordance with the statutory requirements of Section 1260H of the National Defense Authorization Act (NDAA).

Photo by Ministry of Defense - Pete Hegseth, U.S. Secretary of Defense, receiving questions.

Section 1260H, which is compiled and managed by the Department of Defense, allows for the creation of a list of Chinese military companies deemed to be supporting the Chinese military. This time, 188 entities were identified and investigated for inclusion on the 1260H list.

The list published in the Federal Register includes Alibaba, a leading Chinese e-commerce company; Baidu, the largest internet search portal in China; and BYD, a competitor to U.S. electric vehicle manufacturer Tesla. The 1260H list, which includes these companies, was originally published in the Federal Register on February 13, but was withdrawn within minutes at the request of the Department of Defense and remained unpublished until now.

The Department of Defense cited the fact that these companies are directly or indirectly connected with the State-owned Assets Supervision and Administration Commission (SASAC) or the Ministry of Industry and Information Technology (MIIT) of China as the reason for their designation.

Regarding Alibaba and Baidu, the department noted that they are "civil-military fusion contributors to China’s defense industrial base linked to MIIT." For BYD, it stated that the company is "directly or indirectly connected with SASAC and is also indirectly linked to MIIT, making it a civil-military fusion contributor."

Being included on this list does not immediately subject these companies to sanctions or export controls. However, it significantly increases the likelihood that they will be excluded from future Department of Defense contracts or procurement activities.

This designation is particularly seen as a warning message to suppliers delivering to the Department of Defense, as well as to other U.S. government agencies, regarding how these companies are viewed by the U.S. military. The Department of Defense stated, "The U.S. government reserves the right to take additional actions against these entities based on authorities other than Section 1260H."

Yangtze Memory Technologies (YMTC), China’s largest NAND flash manufacturer, and ChangXin Memory Technologies (CXMT), a DRAM manufacturer, which were previously listed under 1260H, remain on the list.

The reason specified is that both companies are indirectly owned by SASAC and are also indirectly linked to MIIT and the State Administration of Science, Technology and Industry for National Defense (SASTIND). When the list was briefly released in February without the inclusion of these two companies, it drew criticism from hardliners in the United States regarding China policy.

This content was produced with the assistance of AI translation services.