US lists China’s BYD, Alibaba, Baidu as ‘Chinese military companies’

Lead

The United States has designated Chinese corporate giants Alibaba, BYD, and Baidu as companies that support China's military, expanding its blacklist to some of the country's best-known commercial brands. The Pentagon included the firms in an update that is likely to complicate the fragile detente between Washington and Beijing after years of rocky relations.

In retaliation, China imposed export controls on 10 US companies involved in defence and rare earths mining, and barred government agencies from buying products from 46 US firms.

Coverage Comparison

The move, which the Pentagon published in a Federal Register notice, adds several Chinese tech companies to its list of firms with links to the Chinese military. The list now includes 188 entities, up from 134 in the previous official revision, as reported by Al Jazeera and South China Morning Post. The designation prevents these companies from getting US military contracts, as reported by Al Jazeera and France 24.

China's response was announced by the Commerce Ministry, which said the export controls are in response to the US government's "egregious act" of adding to its so-called 'Chinese military enterprise list', as reported by The Hindu. The export controls bar exporters from supplying dual-use goods to the 10 US firms, and prohibit any organisation or individual from transferring or providing China-origin dual-use items to the listed companies, a measure that underscores the extraterritorial reach of the move, as reported by South China Morning Post and The Hindu.

The affected US companies include Aveox, which holds aerospace defence contracts with the US military, and Oshkosh Defence, which produces military vehicle fleets, as well as rare earths producers MP Materials and USA Rare Earth, according to The Hindu. France 24 also reported that the list includes military drone makers.

China's Finance Ministry simultaneously announced a ban on agencies involved in public procurement from buying products made by 46 US firms, including Lockheed Martin, Raytheon and Boeing's defence division, as reported by France 24 and The Hindu.

The Pentagon's expanding blacklist is increasing reputational risks for some of China's biggest technology firms and raising the prospect of future restrictions on access to US investment, according to legal experts quoted by South China Morning Post. The latest additions span sectors ranging from artificial intelligence and electric vehicles to robotics and biotechnology, including Alibaba Group Holding, Baidu, BYD, WuXi AppTec, RoboSense and Unitree Robotics. Chinese memory-chip makers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co (YMTC) were also added, after having been briefly removed from the list in February, a move that sparked criticism from China hawks in Washington, according to South China Morning Post.

The announcement weighed on investor sentiment in Hong Kong, with shares of newly designated companies falling across the board, as reported by South China Morning Post.

Key Claims

• The US Department of Defence designated Alibaba, Baidu, BYD, and other Chinese companies as "Chinese military companies" under Section 1260H of the National Defence Authorisation Act, according to South China Morning Post.
• The list of Chinese military companies now includes 188 firms, up from 134 in the previous official revision, as reported by Al Jazeera and South China Morning Post.
• The designation prevents these companies from getting US military contracts, as reported by Al Jazeera, France 24, and South China Morning Post.
• China's Commerce Ministry announced export controls on 10 US entities, including MP Materials, USA Rare Earth, Aveox, and Oshkosh Defence, as reported by The Hindu and South China Morning Post.
• The export controls bar exporters from supplying dual-use goods to the listed entities, and prohibit any organisation or individual from transferring or providing China-origin dual-use items to them, as reported by France 24, The Hindu, and South China Morning Post.
• China's Finance Ministry banned government agencies from buying products from 46 US firms, including Lockheed Martin, Raytheon, and General Dynamics, as reported by France 24 and The Hindu.

Perspectives

China's Commerce Ministry: The measures were taken in response to the US government's "malicious actions" and "egregious act" of adding to its so-called 'Chinese military enterprise list', to safeguard national security and fulfil "international non-proliferation obligations".

Chinese embassy in Washington, DC: The listing was condemned as "discriminatory" and an example of the US government "overstretching" the concept of national security. An embassy spokesperson said that Chinese companies operating overseas have been strictly observing laws and regulations of their host countries.

Baidu: The suggestion that it is a military company is "totally baseless".

Wendy Cutler, senior vice-president at the Asia Society Policy Institute: Beijing's new critical mineral export restrictions underscore how fragile the bilateral truce is.