The United States Department of Defense has added several major Chinese companies, including Alibaba Group, Baidu Inc., and electric vehicle manufacturer BYD, to its list of entities it says are linked to China’s military, in a move that has further escalated tensions between Washington and Beijing.
The designation is part of an update under Section 1260H of the National Defense Authorization Act, which requires the Pentagon to identify companies believed to be connected to China’s military modernization efforts through civil–military integration policies. Although the listing does not impose immediate sanctions, it prohibits the U.S. Department of Defense from entering into contracts with the affected firms and could increase regulatory scrutiny from other parts of the U.S. government and private-sector partners.
The inclusion of Alibaba, Baidu, and BYD represents a significant expansion of the list, which already contains several Chinese technology, telecommunications, and industrial companies. U.S. officials maintain that the measure is necessary for national security reasons and is aimed at preventing indirect support for foreign military development.
China’s embassy in Washington has condemned the decision, describing it as discriminatory and politically motivated. Beijing accused the United States of using national security concerns as a pretext to suppress Chinese companies and undermine their global competitiveness, and urged Washington to reverse the move.
The companies involved have rejected the allegations, insisting they are civilian commercial enterprises focused on areas such as e-commerce, artificial intelligence, and electric vehicle production. Some are reportedly considering legal or administrative steps to challenge their inclusion on the list.
The development adds to growing tensions between the United States and China, particularly in strategic sectors such as artificial intelligence, semiconductors, cloud computing, and electric mobility. Analysts say the move could further deepen the technological divide between both countries and accelerate efforts toward supply chain separation.
Although the designation does not amount to a full ban, it signals increased U.S. scrutiny of major Chinese technology firms and reflects the widening scope of competition between the world’s two largest economies.