The U.S. Department of Defense has added e-commerce giant Alibaba, search engine Baidu, electric vehicle maker BYD and automaker Nio to its official Chinese Military Companies list, barring all four from future Pentagon contracts. The long-awaited update extends Washington’s scrutiny to civilian-facing Chinese companies not traditionally associated with the defense sector.
Published Monday, the updated list covers 188 Chinese entities, up from roughly 130 in the prior year’s version. Created by congressional mandate in 2021, the roster is formally known as the Section 1260H or CMC list and must be updated at least once annually.
Earlier versions of the list applied only to companies owned or controlled by China’s People’s Liberation Army or organizations subordinate to the Central Military Commission of the Chinese Communist Party. The revised criteria now extend to entities under the direction or control of a greater number of Chinese administrative bodies and their affiliates, opening the list to consumer and technology companies operating well outside the defense sector.
The Deputy Secretary of Defense determined that Alibaba and Baidu qualify because both are indirectly affiliated with the State-Owned Assets Supervision and Administration Commission of the State Council. The Pentagon also found that both firms are military-civil fusion contributors to China’s defense industrial base through their affiliation with the Ministry of Industry and Information Technology, which oversees the country’s technology and industrial policies.
BYD and Nio were designated on the same grounds and share the same ministry affiliation cited by the Pentagon. When publishing last year’s update, the Pentagon stated that China’s military sought to acquire advanced technologies and expertise from companies, universities and research programs that “appear to be civilian entities.”
With Alibaba and Baidu now included, the Pentagon’s designations cover all three of China’s largest publicly traded internet companies, which together carry a combined market value of approximately $850 billion. Tencent, China’s largest listed technology firm, was added in January 2025 and has said it intends to challenge its designation. Shares of Alibaba, which trades on the New York Stock Exchange under the ticker BABA, and Baidu, trading as BIDU, both fell into negative territory after the announcement.
The designation does not amount to formal sanctions and does not immediately freeze assets or ban ordinary commercial activity, but it sends a potentially damaging message to Pentagon suppliers and other U.S. agencies about how the U.S. military views the listed firms. While companies on the list can continue doing business in the United States, they face reputational damage and the prospect of further restrictions.
Beginning June 30, 2026, the Defense Department will be prohibited from contracting directly with any listed company under what the Pentagon calls an “entity prohibition.” Beginning June 30, 2027, that restriction extends through the supply chain, barring the Pentagon from acquiring goods or services sourced from listed companies even when purchased through third parties. U.S. technology and merchandising companies can also be compelled to divest or sever ties with any listed firm to preserve their own federal contracts.
Beyond the procurement timeline, listed firms can face DoD investment restrictions, supply chain exclusions, heightened trade scrutiny and added challenges in obtaining licenses for U.S. technology. The updated list covers sectors that have drawn growing scrutiny from China-focused lawmakers, including semiconductors, artificial intelligence, robotics, electric vehicles, pharmaceuticals and communications hardware.
For China’s largest firms, the designations are another sign that their global business ambitions are increasingly entangled with the strategic rivalry between the world’s two largest economies. The list’s release came less than a month after President Donald Trump met Chinese leader Xi Jinping in Beijing, where both sides maintained a fragile truce in the ongoing trade dispute.
Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, described the move as calculated. “It serves as a post-summit reality check,” Singleton said. “The administration is not treating the perception of summit success as a reason to stand down. It is using the post-summit window to sequence pressure, leaving enough distance before a possible September Xi visit to manage diplomatic fallout.” Singleton also told Reuters that Washington is no longer treating the listed firms as isolated companies but is instead viewing “the entire technology stack as strategically contested.”
In February, the Pentagon briefly posted a preliminary version of the updated list before withdrawing it the same day without explanation. That draft excluded memory chipmakers CXMT and YMTC, drawing criticism from China hawks who view both companies as central to Beijing’s artificial intelligence ambitions. The final version published Monday restores both firms to the list.
Beyond the headline additions, the updated roster includes biotech firm WuXi AppTec, robotics companies Unitree and RoboSense, communications hardware maker TP-Link Technologies, display manufacturer BOE Technology Group, battery maker EVE Energy, solar companies JA Solar Technology and Trina Solar, and additional firms including Tianma Microelectronics, CALB Group, Zhongji Innolight and telecom equipment maker Baicells. TP-Link claims more than 30 percent of the U.S. market for certain networking devices, including WiFi routers, while Baicells was reported by Reuters last year to be under investigation by both the FBI and the Commerce Department.
Unitree Robotics, a Hangzhou-based maker of humanoid and quadruped robots, drew public attention before its designation when a troupe of its humanoid robots performed a dance routine on NBC’s “America’s Got Talent,” impressing judge Simon Cowell. The Pentagon said Unitree knowingly received assistance from the Chinese government through its official designation as a small or medium-sized enterprise considered highly innovative, highly competitive globally and critical to China’s supply chain.
Last week, Nvidia CEO Jensen Huang said the chipmaker planned to partner with Unitree to develop robotic platforms for researchers. Unitree did not immediately respond to a request for comment.
Two entities owned by Chinese state oil company CNOOC, CNOOC China Ltd. and CNOOC International Trading, were removed from the updated roster. A third CNOOC subsidiary, China BlueChemical Limited, was added, with the Pentagon citing CNOOC’s direct control by the Chinese government. DJI, a consumer drone manufacturer, had already appeared on the list before Monday’s update.
Alibaba said there was no basis for its inclusion, calling itself neither a Chinese military company nor part of any military-civil fusion strategy. The company said the listing would not affect its ability to conduct business as usual in the United States or anywhere in the world and said it would pursue all available legal action to challenge the designation.
Baidu called the suggestion that it is a military company entirely baseless and said it would use every available option to seek removal. BYD, the world’s largest electric vehicle seller, said it is not a military enterprise and that the determination contradicts the facts, pledging to use all available legal and administrative means to protect its rights and interests and stating the decision harmed its development achievements in the United States.
WuXi AppTec called its inclusion incorrect and pledged to take immediate action to challenge the designation. Nio said in a filing with Hong Kong’s stock exchange that the procurement restrictions would not affect its operations.
China’s Foreign Ministry condemned the designations on Tuesday, calling the list discriminatory and saying it unreasonably suppressed Chinese companies. Ministry spokesperson Lin Jian said China would take necessary measures to protect the legitimate rights and interests of Chinese enterprises.
The Chinese Embassy in Washington accused the U.S. of overstretching national security concepts and targeting Chinese companies with discriminatory measures, adding that Chinese companies observe the laws and regulations of the countries where they do business. “The U.S. should stop its wrong practice and create a fair, just and non-discriminatory environment for Chinese companies,” the embassy said.
Rep. John Moolenaar, the Michigan Republican who chairs the House Select Committee on China, called the designations a warning to U.S. businesses and consumers. “These Chinese companies are working with the Chinese military against our national interests,” Moolenaar said. “Any of them that are publicly traded on U.S. exchanges should be immediately delisted and their products should be removed from supply chains our country depends on.”
The House Select Committee on the Chinese Communist Party called the updated list a warning to American businesses, all levels of government and the American people. The committee said companies that trade publicly on U.S. exchanges should be delisted, adding that no American company should do business with those named on the list because doing so would enable China’s military ascendance.
In January, Trump said he would welcome Chinese carmakers such as BYD if they built plants in the United States and hired American workers, while a number of U.S. lawmakers have separately pushed for an outright ban on Chinese electric vehicles.
Companies placed on the list have the option to petition for removal, though getting off is difficult. Smartphone maker Xiaomi successfully sued to be removed from an earlier version of the Pentagon list in 2021, standing as one of the rare cases in which a listed company prevailed.