Pentagon Adds Chinese Firms to Military-Linked List, Sparking Tensions

The Pentagon has expanded its list of Chinese companies linked to Beijing’s military. This updated list includes major technology and consumer brands, potentially setting the stage for future investment restrictions and sanctions.

The updated roster, mandated by Congress in 2021, features 188 entities the U.S. Department of Defense considers part of China’s military-industrial ecosystem. Notable additions are Alibaba, BYD, and robotics firm Unitree. These companies are not state-owned and are not typically associated with the defense sector.

Concerns Over Civil-Military Fusion

U.S. policymakers express concern over China’s military modernization, with private firms playing a role in the civil-military fusion strategy. This doctrine merges commercial innovation with defense capabilities. U.S. officials worry that Chinese companies can be required to provide data, technology, and support to the government, advancing military capabilities.

The Pentagon’s designation aligns with broader U.S. actions to restrict China’s access to strategic advanced technologies, including AI chips, semiconductor equipment, and quantum computing.

Potential Implications

Being listed doesn’t automatically lead to sanctions, but it could justify future investment and procurement restrictions.

Beijing’s Response

China accuses the U.S. of unfairly targeting Chinese businesses under national security pretenses.

Chinese Foreign Ministry spokesperson Lin Jian urged the U.S. to stop its actions against Chinese companies, promising to protect their legitimate rights and interests.

Reasons Behind Targeting Firms

Alibaba, a significant tech company in e-commerce and cloud computing, was labeled a military-civil fusion contributor linked to China’s Ministry of Industry and Information Technology.

BYD, a leading electric vehicle manufacturer, was also added. Despite minimal U.S. market share, former President Donald Trump encouraged Chinese automakers to establish factories in the U.S., a stance contrasting with some U.S. lawmakers calling for a ban on Chinese electric vehicles.

Unitree, renowned for its humanoid robots like the kung fu-performing machines showcased at the Spring Festival Gala, symbolizes China’s rapid robotics and AI advancements.

Newsweek reached out to Alibaba, BYD, and Unitree for comments.

Congressional Reaction

The U.S. House Select Committee on the Chinese Communist Party supported the Pentagon’s move and called for stricter actions against listed companies. The committee sees this list as a warning to American businesses and investors.

They urged for delisting from U.S. exchanges and removal of products from essential supply chains. According to the committee, American companies engaging with these firms enable China’s military rise.

This expanded list reflects ongoing U.S. efforts to scrutinize Chinese firms in strategic sectors amid intensifying competition beyond trade, extending into technology and national security.

This article includes reporting by The Associated Press.