A general view of Baidu’s office building in Pudong, Shanghai on February 9, 2026.
Ying Tang | Nurfoto | getty images
The Pentagon targeted several Chinese companies, including alibaba group, Baidu Inc and car manufacturers BYDon the list of entities they believe have aided the Chinese military, complicating delicate diplomatic relations between Washington and Beijing.
The Defense Department published an update “1260H List” Monday evening Stateside – A roster of companies that the Pentagon considers to be associated with China’s military or defense industrial base.
The designations do not explicitly impose restrictions, but mean the Defense Department will be prohibited from contracting directly with the listed companies from the end of this month and from purchasing their products or services through third parties from June 2027.
“These indirect sanctions could force some US companies working with the US military to drop designated Chinese companies as suppliers,” said Michael Hirson, head of China Research at 22V Research.
Baidu’s American depositary receipts fell 2.1%, Alibaba fell 0.8% and BYD fell 0.8%.
The changes come after President Donald Trump met Chinese leader Xi Jinping in Beijing last month, where the two leaders agreed to a trade ceasefire and announced a joint investment and trade board. The update underscores recurring tensions in bilateral relations and security concerns in Washington over Chinese technology as a strategic threat.
The Pentagon briefly posted a similar expanded list in February, then withdrew it without explanation pending Trump’s visit to China. The version released Monday largely mirrors the February update, but restores Chinese memory chip makers CXMT and YMTC, which were removed from the withdrawn list — an omission that drew criticism from China’s supporters in Washington at the time.
According to the Defense Department notice, the listed companies are considered affiliated with China’s State-owned Assets Supervision and Administration Commission, and are designated as “military-civilian fusion” contributors to China’s defense industrial base through ties with the Ministry of Industry and Information Technology.
The list also includes biotech giant Wuxi AppTech, lidar maker RoboSense Technology and Unitri, a leading Chinese maker of humanoid robots. US chip maker Nvidia last week announced its plans to work with the company to develop robots for research use.
The breadth of the additions reflects Washington’s view that civilian technology companies in China are inextricably linked to the state’s military priorities, underscoring concerns that have fueled Washington’s ban on China’s semiconductors, artificial intelligence hardware and advanced manufacturing.
While the moves are largely symbolic because they fall short of investment or export blacklists, it shows how broadly Washington has drawn the line around sensitive Chinese technology spanning consumer electronics, biotech and robotics, Hirson said.
Still, Hirson said he does not expect the U.S. Treasury or Commerce chief to add more formal sanctions to Chinese tech companies this year, as Washington prefers to keep bilateral relations at a stable level.
Wuxi AppTech and Alibaba disputed the designations and demanded their removal. Baidu and BYD did not respond to requests for comment.
“There is no basis to conclude that Alibaba should be placed on the Section 1260H list. Alibaba is not a Chinese military company and is not part of any military-civilian fusion strategy. We will take all available legal action against efforts to misrepresent our company,” the company said in a statement to CNBC.
Some Chinese companies have sued the Pentagon to challenge the listing, with Xiaomi winning the court challenge It was removed as a result In May 2021.
