The U.S. Department of Defense placed a slew of China's flagship big tech and advanced manufacturing corporations, including Alibaba, Baidu, and BYD, on a list of "People's Liberation Army (Chinese military) supporting companies." The move is seen as treating across-the-board core Fourth Industrial Revolution technologies where China stands out—such as artificial intelligence (AI), Autonomous Driving, and Humanoid Robot—as military threats, and taking direct aim at China's entire tech ecosystem as a target for strategic competition.
On the 8th (local time), the U.S. Department of Defense published in the Federal Register an updated list of 188 Chinese military corporations operating in the United States under Section 1260H of the National Defense Authorization Act (NDAA). Inclusion on the list does not immediately freeze a corporation's asset or impose a blanket ban on U.S. exports. However, starting on the 30th of this month, corporations on the list cannot enter into or renew direct procurement contracts with the U.S. Department of Defense. Beginning June 30 next year, even purchasing end products that include these corporations' parts or services via third parties will be completely prohibited.
This "third-party procurement ban" provision is a critical blow to Chinese corporations. The U.S. Department of Defense is the world's largest single buyer. From June next year, not only U.S. defense, aerospace, and telecommunications corporations, but all corporations worldwide that do business with the U.S. Department of Defense, including those in Korea, must completely remove the Chinese corporations' technologies and parts on the list from their own supply chains.
The new list includes Alibaba, China's largest e-commerce firm; Baidu, the No. 1 search engine; and BYD, the world's largest electric vehicle maker. AI big tech firm Tencent, NAND flash maker Yangtze Memory Technologies (YMTC), DRAM maker ChangXin Memory Technologies (CXMT), Humanoid Robot corporation Unitree, Autonomous Driving lidar firm RoboSense, and biotech corporation WuXi AppTec—companies now at the forefront of China's advanced industries—were also extensively covered.
The U.S. Department of Defense judged that these corporations, though not traditional defense contractors making tanks or missiles, contribute to the Chinese government-led military-civil fusion strategy. Outwardly they take the form of strictly private corporations, but the claim is that they are directly or indirectly linked with key state bodies such as the State-owned Assets Supervision and Administration Commission (SASAC) and the Ministry of Industry and Information Technology (MIIT), providing advanced technologies for military modernization. Craig Singleton, a China expert at the Foundation for Defense of Democracies (FDD), said, "Washington no longer treats these corporations as isolated companies," adding, "It is treating the entire tech stack as a target for strategic competition."
The U.S. Department of Defense closely examined how individual technologies could be used for the People's Liberation Army's command systems, surveillance, and unmanned operations. According to the Federal Register, Alibaba and Baidu were designated because they possess cloud, AI, and large-scale data-processing infrastructure beyond simple shopping malls or search engines. The United States warned that these platforms could be repurposed for military command and information processing, and for developing unmanned weapons models. BYD, a powerhouse in the electric vehicle market, is also analyzed to be targeted for its battery and electrification platform technologies that can be widely used in combat vehicles, drones, and field power grids. Some corporations such as Unitree were cited as contributing to military-civil fusion simply because they benefited from the "little giant" policy, under which the Chinese government focuses on nurturing high-tech small and mid-size champions.
This is expected to trigger a strong chain reaction across global supply chains, not just among U.S. companies. The U.S. Department of Defense designation list creates a "security risk corporation" stigma effect. There is a high possibility that exclusion criteria will spread to other federal agencies in the United States, as well as to allied public procurement markets and large-scale infrastructure projects. Allied corporations that supply products to U.S. defense, telecommunications, and aviation procurement networks must, starting on the 30th, comprehensively reexamine whether products from the listed corporations are included anywhere in their own procurement chains.
For example, if BYD batteries, Alibaba cloud services, RoboSense lidar sensors, or Tencent communication modules are mixed into military vehicles or equipment supplied to the U.S. Department of Defense, the bid itself will be blocked at the source. U.S. big law firm Wiley Rein said, "Under Section 851 of the fiscal year 2025 National Defense Authorization Act, which will soon take effect, the U.S. Department of Defense also plans to completely prohibit contracting with partners that contract with organizations lobbying for companies on the 1260H list." It is a warning that global corporations must prepare for stricter and tougher due diligence obligations related to China than now.
As de facto institutional expulsion from the U.S. public procurement market took hold, the targeted corporations and the Chinese government pushed back strongly. The Chinese Embassy in the United States said in a Spokesperson's statement the same day, "The United States is overly expanding the concept of national security to drive Chinese corporations out with a discriminatory list," and criticized, "The United States should stop the wrong practice and create a fair, just, and non-discriminatory environment for Chinese corporations." WuXi AppTec, a pharmaceutical and biotech corporation newly added to the list, told Reuters, "Our inclusion on the list is a clear mistake," and said, "We will take immediate steps to correct the wrong decision." Alibaba and Baidu also maintained from the time of the list's release that their products and services are strictly commercial, signaling legal action such as lawsuits.
The move came immediately after the summit between U.S. President Donald Trump and Chinese President Xi Jinping held in Beijing on Nov. 13. The U.S. Department of Defense had previously published a similar list in the Federal Register in February, excluding some key semiconductor corporations such as Yangtze Memory Technologies, only to withdraw it right away without special explanation. At the time, the interpretation gained traction that it was an administration-level decision not to excessively provoke China ahead of the bilateral talks.
Subsequently, President Donald Trump in January said, "If Chinese carmakers like BYD build plants in the United States and hire American workers, we would welcome it," at times showing a somewhat flexible stance toward Chinese corporations. But once the conciliatory mood of the summit, such as easing trade tensions, passed, the United States again picked up an all-out pressure card aimed at technology hegemony. This is analyzed as evidence that, despite the U.S.-China leaders' meeting, there has been no change in the fundamental conflict structure over the lead in technology security and in Washington's hard-line posture to keep China in check.