The United States Department of Defense has significantly expanded its list of Chinese military-linked companies, adding 188 entities—the largest single update since the list was created in 2021. Among the new additions are household names such as e-commerce giant Alibaba, electric vehicle manufacturer BYD, and search engine and AI developer Baidu, marking a notable incursion into China's civilian technology sector.
The updated list, published on Monday, now includes 188 companies, up from 134 last year. The Pentagon's designation bars these firms from US defence contracts and is intended to identify entities that contribute to China's military-civil fusion strategy—a policy that encourages civilian companies to support military objectives. The move reflects growing wariness in Washington about Beijing's approach to leveraging commercial innovation for defence purposes.
What Being on the List Means
Companies on the list can still operate in the US and engage in non-defence business, but they face reputational damage and potential further restrictions. The list already included prominent firms such as DJI, the world's leading consumer drone manufacturer. After the update, the House Select Committee on the Chinese Communist Party issued a statement calling the list "a warning to American businesses, all levels of government, and the American people," and urged that publicly traded companies on the list be delisted from US stock exchanges.
The Pentagon's rationale for including Alibaba, BYD, and Baidu centres on their affiliation with China's Ministry of Industry and Information Technology (MIIT), which oversees technology and industrial policy. Alibaba, which is listed on the New York Stock Exchange, was cited for helping to boost China's defence industrial base through its ties to MIIT. BYD and Baidu were similarly flagged for their connections to the same ministry.
Both Alibaba and Baidu have pushed back against the designation. "Alibaba is not a Chinese military company nor part of any military-civil fusion strategy," the company said in a statement. Baidu, which has expanded into artificial intelligence and autonomous driving, called the suggestion that it is a military company "entirely baseless."
The expansion comes at a time of heightened transatlantic scrutiny of Chinese investments and technology. European policymakers have been grappling with similar concerns, particularly around Chinese involvement in critical infrastructure and emerging technologies. The EU has recently moved to tighten scrutiny of Chinese port investments and counter tariff circumvention, as reported by European Pulse and European Pulse.
Broader Implications and Diplomatic Fallout
Among the other additions is Chinese robotics company Unitree, known for its dancing robots that appeared on NBC's America's Got Talent. The Pentagon stated that Unitree "knowingly received assistance" from the Chinese government through its designation as a highly innovative small or medium-sized enterprise critical to the country's supply chain.
Beijing reacted sharply to the expanded list. The Chinese Embassy in Washington accused the US of "overstretching the concept of national security and making discriminatory lists to go after Chinese companies," adding that Chinese firms comply with local laws in the countries where they operate.
The move also highlights the complex interplay between US-China tensions and European defence and economic interests. As the EU considers its own approach to military spending and technological sovereignty, the Pentagon's list serves as a reminder of the challenges facing European companies that may have ties to both US and Chinese markets. The EU's defence chief recently estimated that replacing US military assets would cost Europeans €500 billion, as covered by European Pulse.
For European investors and businesses, the expanded blacklist adds another layer of uncertainty in an already fraught geopolitical landscape. Companies with supply chains or partnerships involving any of the 188 listed entities may need to reassess their exposure, particularly in sectors like electric vehicles, AI, and robotics, where Chinese firms are key players.
