Pentagon seeks to add Alibaba, Baidu, BYD to China military list

The Pentagon has concluded that Alibaba Group Holding, Baidu Inc and BYD Co should be added to a list of companies that aid the Chinese military, Bloomberg News reported on Wednesday.

Deputy Defence Secretary Stephen Feinberg informed lawmakers of the conclusion in a letter on October 7, three weeks before Presidents Donald Trump and Xi Jinping agreed to a broad trade truce, according to the report.

It is not immediately clear if the companies have been added to the Pentagon's 1260H list of Chinese companies deemed military-linked but operating in the U.S., Bloomberg reported.

While the designation does not involve immediate bans, it can be a blow to the reputations of affected companies and represents a stark warning to U.S. entities and firms about the risks of conducting business with them.

Feinberg said the three companies and five others, Eoptolink Technology Inc, Hua Hong Semiconductor Ltd , RoboSense Technology Co, WuXi AppTec Co and Zhongji Innolight Co, merit inclusion on the 1260H list, according to the report.

An Alibaba spokesperson told Reuters in an emailed statement that "there's no basis to conclude that Alibaba should be placed on the Section 1260H List", clarifying that "Alibaba is not a Chinese military company nor part of any military-civil fusion strategy."

The company also added that "being on the Section 1260H List would not affect our ability to conduct business as usual in the United States or anywhere in the world" as it doesn't do any business related to U.S. military procurement.

The Pentagon, Baidu and BYD did not immediately respond to Reuters request for comments.

The annually updated list of Chinese military companies, formally mandated under U.S. law as the "Section 1260H list", designated 134 companies in its last update in January, including Chinese tech giant Tencent Holdings and battery maker CATL.