WASHINGTON, D.C. – The Pentagon has reportedly concluded that Chinese tech and manufacturing giants Alibaba Group Holding (9988.HK), Baidu Inc (9888.HK), and BYD Co (1211.HK) should be added to the U.S. Department of Defense’s list of companies that aid the Chinese military, according to Bloomberg News.

Deputy Defense Secretary Stephen Feinberg notified U.S. lawmakers of the recommendation in a letter dated October 7, three weeks prior to a broad trade truce agreement between President Donald Trump and President Xi Jinping.

What Is the Section 1260H List?

The so-called Section 1260H list identifies foreign companies deemed to have ties to foreign military operations while operating in the United States. The designation does not impose immediate bans, but it can significantly impact a company’s reputation and serve as a warning to U.S. firms about the risks of doing business with the entities involved.

In its last update in January 2025, the list included 134 Chinese companies, including tech giant Tencent Holdings (0700.HK) and battery manufacturer CATL (300750.SZ).

Other Companies Under Consideration

According to the Bloomberg report, the Pentagon’s recommendation also included five other Chinese firms:

• Eoptolink Technology Inc (300502.SZ)
• Hua Hong Semiconductor Ltd (688347.SS)
• RoboSense Technology Co (2498.HK)
• WuXi AppTec Co (603259.SS)
• Zhongji Innolight Co (300308.SZ)

These companies are all being evaluated for potential links to China’s military or strategic defense initiatives.

Corporate Responses

Alibaba issued a statement denying any military affiliation:

“There’s no basis to conclude that Alibaba should be placed on the Section 1260H List. Alibaba is not a Chinese military company nor part of any military-civil fusion strategy.”

The company added that inclusion on the list would not affect its operations in the U.S. or globally, as it does not engage in business related to U.S. military procurement.

Neither the Pentagon, Baidu, nor BYD immediately responded to requests for comment.

Implications for U.S.-China Business Relations

Being designated as a military-linked company could influence U.S. investors and corporate partners, creating reputational challenges even without immediate legal or trade restrictions. Analysts note that the Section 1260H list serves as a tool to monitor and caution U.S. entities regarding business engagement with Chinese firms potentially tied to military or strategic sectors.

With geopolitical tensions and trade negotiations ongoing, the inclusion of Alibaba, Baidu, and BYD could have broad implications for U.S.-China commercial relations, particularly in technology, e-commerce, and electric vehicle sectors.