The United States has added BYD to the Pentagon military list of companies said to have ties to China’s armed forces, alongside technology companies Alibaba and Baidu in a move that risks deepening trade and diplomatic tensions between Washington and Beijing.
The list, formally known as Section 1260H, was published in a post on the Federal Register on Monday and now names more than 80 companies described as Chinese military companies directly or indirectly engaged in providing commercial services in the United States. Inclusion on the list does not trigger immediate sanctions, but it is designed to alert American organisations to the risks of doing business with the named firms.
How the BYD Pentagon military list determination was made
Deputy Defense Secretary Stephen Feinberg determined that the listed entities qualify as Chinese military companies under Section 1260H of the FY 2021 National Defense Authorization Act, according to Washington Trade & Tariff Letter. The same statute requires the Pentagon to publish the unclassified portion of the list annually through 2030 and to make additions or deletions at least once a year, meaning the list will remain a recurring instrument of US policy for the foreseeable future.
The June notice also removes CNOOC China Limited and COSCO SHIPPING Finance from the list, a reminder that the designation process runs in both directions, with companies capable of being struck off as well as added.
Alibaba, BYD and Baidu were among those accused of serving as military-civil contributors to Chinese defence operations. Policy analyst Stefanie Kam from the Nanyang Technological University said the US appears to have flagged these companies for their participation in state programmes rather than based on clear evidence of contracts with the Chinese military.
Companies push back, China calls designations discriminatory
The responses from named firms were swift. An Alibaba spokesperson said the firm is ‘not a Chinese military company nor part of any military-civil fusion strategy,’ adding: ‘We will take all available legal action against attempts to misrepresent our company.’ A Baidu spokesperson said ‘there is no credible justification’ for its inclusion on the list and that the company will ‘use all options available’ to have its name struck off.
The Chinese embassy in the US told the BBC that the list is ‘discriminatory’ and that firms from China have strictly complied with the laws abroad. The BBC has contacted BYD and several other firms named on the list for comment.
BYD does not export its cars to the US. The electric vehicle maker surpassed Tesla earlier this year to become the world’s top EV maker. Its appearance on the list sits alongside that of fellow electric car manufacturer Nio and aircraft manufacturer Comac. Technology companies Tencent and Huawei, drone producer DJI and battery maker CATL, which were added in previous iterations of the list, remain on it.
Geopolitical stakes and the risk of retaliation
Beijing will likely view the move as a ‘form of economic containment’, Kam said. China could possibly retaliate with tit-for-tat sanctions, add American firms to a list of its own, or respond with some form of diplomatic pushback, she added.
The broader backdrop is one of sustained US pressure on Chinese technology and industrial companies. In 2019, Washington barred US firms from doing business with Huawei over national security concerns linked to its equipment. Huawei has denied claims that using its products presents security risks and says it is independent from the Chinese government.
Some of the businesses on the Section 1260H list compete directly with major American companies in industries including electric vehicles and artificial intelligence. The annual publication cycle mandated through 2030 means that the list, and the disputes it generates, are built into the architecture of US-China commercial relations for years to come.
