BYD, Alibaba Denounce Pentagon Blacklisting as Baseless

Chinese technology and manufacturing giants including BYD, Alibaba Group, Baidu, and NIO have forcefully rejected their inclusion on the US Department of Defense’s updated “Chinese Military Companies List” (1260H List), calling the designation unjustified and pledging to explore legal remedies. The Pentagon on June 8 added 16 Chinese companies to the list, bringing the total to 188 entities, in a move that underscores deepening US-China technology competition.

Background: The Expanding 1260H List

Created under Section 1260H of the FY2021 National Defense Authorization Act, the list was initially an informational register identifying Chinese companies with alleged ties to the People’s Liberation Army. Successive legislative changes have transformed it into a powerful tool. The FY2024 NDAA introduced mandatory Pentagon procurement bans, while the FY2025 NDAA fundamentally expanded the definition of “Chinese military company” to include entities deemed “civil-military fusion contributors” — a category that captures companies affiliated with China’s Ministry of Industry and Information Technology (MIIT) and other state bodies, as Caixin Global reported.

The expansion has been controversial. In February 2026, the Pentagon briefly published an updated list adding BOE Technology while removing Yangtze Memory Technologies (YMTC) and ChangXin Memory Technologies (CXMT), only to retract it within hours after White House objections. The June version keeps YMTC and CXMT on the list.

Company Responses: Coordinated Denials

The affected companies issued near-simultaneous announcements on June 9 through the Hong Kong Stock Exchange, uniformly denying any military connections.

BYD stated that the company “has no正当理由 (justifiable reason)” for its inclusion, emphasizing that the list “is not a sanctions list” and that the designation “will not affect the Group’s normal business operations,” according to The Paper.

Alibaba Group called its inclusion “a mistake,” asserting there is “no basis whatsoever” for the designation. “Alibaba Group is not a Chinese military company and has not participated in any civil-military integration strategy,” the company said, adding that it “will take all feasible legal actions” against attempts to distort its image.

Baidu similarly rejected the classification, stating it is “neither a Chinese military enterprise nor a civil-military integration enterprise of China’s defense industry.” NIO said it will “actively communicate with the US Department of Defense to correct the Company’s inclusion,” including through legal action if necessary, as Guancha reported.

WuXi AppTec, the Shanghai-listed biotech firm, called the determination “clearly erroneous” and said it would “immediately take measures to challenge and correct this erroneous determination.”

What the List Actually Does

It is critical to distinguish the 1260H list from other US restrictions. The list primarily prohibits the Department of Defense from procuring goods or services from listed entities — a direct ban effective June 30, 2026, and an indirect supply chain ban effective June 30, 2027. It does not impose export controls (Commerce Department’s Entity List), investment bans (Treasury’s NS-CMIC List), or asset freezes (OFAC’s SDN List).

However, as analysis by Jiwei (laoyaoba.com) notes, the reputational risk and potential “over-compliance” by international customers and financial institutions could create a “chilling effect” more damaging than the legal restrictions themselves.

Chinese Government Condemnation

Chinese Foreign Ministry Spokesperson Lin Jian condemned the move at a regular press conference on June 9. “China has always firmly opposed the US overstretching the concept of national security, drawing up various types of discriminatory lists, and unreasonably suppressing Chinese companies,” Lin said. “China will take necessary measures to firmly safeguard the legitimate rights and interests of Chinese companies,” as The Guardian reported.

Analysis: Broader Implications

The expanded 1260H list represents a structural shift in US-China economic relations, moving beyond traditional trade disputes into technology and industrial policy. The inclusion of “civil-military fusion” criteria reflects Washington’s concern about China’s strategy of integrating civilian and military technological development — a concern that now captures everything from electric vehicles to e-commerce platforms.

For the affected companies, the direct financial impact is likely limited given minimal Pentagon contracts. But the medium-term risks are significant: international banks and partners may sever ties to avoid regulatory exposure, and the list could expand further as US-China technology competition intensifies. Several companies have signaled they will challenge their inclusion through litigation, though the expanded FY2025 NDAA definitions have made removal significantly harder.

What to Watch For

As the June 30 direct procurement ban deadline approaches, attention will focus on whether affected companies file lawsuits and whether the list continues to expand — potentially capturing other major Chinese firms such as Tencent or Xiaomi. China’s promised “necessary measures” in response also remain unspecified, leaving room for further escalation in the world’s most consequential bilateral economic relationship.