U.S. Department of Defense Lists Alibaba, BYD as Chinese Military Support Companies... YMTC, CXMT Remain on List (Comprehensive)

Disadvantages in Defense Contracts and Procurement Projects
Both Major Chinese Memory Firms YMTC and CXMT Included

The U.S. Department of Defense has included major Chinese big tech companies such as Alibaba, Baidu, and BYD in its list of companies supporting the Chinese military. Leading Chinese semiconductor firms Yangtze Memory Technologies Co. (YMTC) and Changxin Memory Technologies (CXMT) have also been added to the list.

On June 8 (local time), the Department of Defense stated in a press release, "In accordance with the statutory requirements of Section 1260H of the National Defense Authorization Act (NDAA), we have published an updated list of Chinese military companies that operate, either directly or indirectly, in the United States in the Federal Register."

Pete Hegseth, U.S. Secretary of Defense, Department of Defense

Section 1260H, which is prepared and managed by the Department of Defense, is a system that identifies and publicly discloses Chinese military-related companies operating directly or indirectly in the United States. A total of 188 companies were included in this latest list.

Among those listed in the Federal Register are 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1260H list, which includes these companies, was originally published in the Federal Register on February 13, but it was withdrawn within minutes at the request of the Department of Defense and remained unpublished.

The Department of Defense pointed out that Alibaba is indirectly linked to the State-owned Assets Supervision and Administration Commission (SASAC) and is considered a contributor to "Military-Civil Fusion" connected to the Ministry of Industry and Information Technology (MIIT) of China.

Regarding Alibaba and Baidu, the Department of Defense described them as "contributors to the military-civilian complex of China’s defense industrial base, associated with MIIT." For BYD, it was noted that it is both directly and indirectly linked to SASAC, and indirectly connected to MIIT, classifying it as a contributor to the military-civilian complex as well.

Being included on the 1260H list does not immediately result in sanctions or export controls. However, there is an increased likelihood that these companies will face disadvantages in procurement contracts or participation in government projects with the Department of Defense. It also serves as an official notice to the U.S. government and private companies that these entities are deemed by the Department of Defense to have ties to the Chinese military.

The Department of Defense stated, "The U.S. government retains the right to take additional actions against these companies using legal authorities other than 1260H."

This announcement came after a series of complications. The list was originally scheduled to be published in the Federal Register in February, but was withdrawn immediately after its release at the Department of Defense's request. At that time, there was speculation in Washington that the move was intended to avoid diplomatic friction ahead of a summit meeting between then-U.S. President Donald Trump and Chinese President Xi Jinping.

Semiconductor companies were also included. Yangtze Memory Technologies Co. (YMTC), the largest NAND flash manufacturer in China, and Changxin Memory Technologies (CXMT), a DRAM maker, remain on the list as before. The Department of Defense explained that YMTC is linked to SASAC, MIIT, and the State Administration of Science, Technology and Industry for National Defense (SASTIND), while CXMT is also directly and indirectly connected to MIIT and SASAC.

The rationale stated for these two companies is that they are indirectly owned by SASAC and are indirectly linked to MIIT and SASTIND. When the list was briefly published in February without these two companies, it drew criticism from U.S. hardliners on China policy.

Other major Chinese technology and manufacturing companies, such as Huawei, Tencent, DJI, SMIC, CATL, and NIO, were also included in the list.

With the finalization of this list, it is expected that affected companies will step up their opposition and legal actions. When Alibaba and Baidu were revealed to be on the list in February, they indicated the possibility of legal action, asserting that they are merely providers of civilian products and services, not military-related companies.

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