BYD added to the Pentagon’s Section 1260H list of alleged Chinese military-linked companies is the latest move in an escalating pattern of US restrictions, with electric vehicle maker BYD joined by technology giant Alibaba, Baidu and a string of other major Chinese firms in an update published on the Federal Register on Monday.
A Larger and More Wide-Ranging List Than Before
The update, dated 6 January 2025, brings the total number of entities on the Section 1260H list to 134, spanning sectors including artificial intelligence, aerospace and biotechnology, according to Hogan Lovells. The revised list names 17 new entities while removing three from the prior version, as noted by Akin Gump Strauss Hauer & Feld. In total, the Department of Defense’s list now names more than 80 Chinese companies directly or indirectly engaged in providing commercial services in the United States.
The practical consequences for affected businesses are more limited than the designation might initially suggest. Being named to the list, by itself, does not prohibit US businesses from continuing to transact with these companies, though it can act as an indication that further US government action may be under consideration, according to Morgan Lewis. The list is designed instead to alert American organisations to the risks of doing business with the firms named.
BYD Added to Pentagon List Alongside Alibaba, Baidu and Nio
Alibaba, BYD and Baidu were among companies accused of serving as a military-civil contributor to Chinese defence operations. 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, said policy analyst Stefanie Kam from the Nanyang Technological University. BYD, which does not export its cars to the US, surpassed Tesla earlier this year to become the world’s top electric vehicle maker. Other Chinese firms on the list include electric car maker Nio and aircraft manufacturer Comac, while Tencent, Huawei, drone producer DJI and battery maker CATL, added in previous rounds, remain on it.
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.
Firms Push Back; Beijing Calls the List Discriminatory
Responses from the named companies were swift. Alibaba’s 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 and that the company will ‘use all options available’ to have its name struck off. The BBC has contacted BYD and several other firms on the list for comment.
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. Beijing will likely view the move as a ‘form of economic containment’, said Kam. She added that 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.
The announcement risks aggravating tensions between Washington and Beijing at a moment when some of China’s top companies compete directly with major American firms in industries including electric vehicles and artificial intelligence. The designation of BYD added to the Pentagon list is particularly pointed given the broader global contest for EV market share, even though the company does not currently sell cars in the United States. With the revised list now in force, affected firms and their US counterparts will be watching closely to see whether further regulatory action follows.
