The US has added several major firms from China, including e-commerce giant Alibaba and electric car maker BYD, to a list of companies said to have ties with the Chinese military.
The Department of Defense’s list aims to alert American organisations to the risks of doing business with the Chinese firms, but their inclusion does not mean they are immediately sanctioned.
The Chinese embassy in the US told the BBC the list was “discriminatory” and said firms from China have strictly complied with the laws abroad.
The BBC has contacted BYD and several firms on the list for comment. Alibaba’s representatives said separately that there was no basis for their companies to have been listed.
The list, known as Section 1260H, was announced in a post on the Federal Register on Monday and names some of China’s top companies – a move that risks aggravating tensions between Washington and Beijing.
The Pentagon flagged 188 “Chinese military companies” deemed as a national security risk to the US. Many of these businesses are directly or indirectly engaged in providing commercial services for the US.
Some of them compete directly with major American companies in industries such as electric vehicles and artificial intelligence.
For instance BYD, which does not export its cars to the US, surpassed Tesla earlier this year to become the world’s top EV maker.
Beijing is likely to view the move as a “form of economic containment”, said policy analyst Stefanie Kam from the Nanyang Technological University.
China could possibly retaliate with tit-for-tat sanctions, add American firms to a list of its own or respond with some form of diplomatic pushback, Kam said.
Alibaba, BYD and tech giant Baidu were among companies accused of serving as a military-civil contributor to Chinese defence operations, according to the list.
The US appears to have flagged these companies for their participation in state programmes rather than based on clear evidence of contracts with the Chinese military, Kam said.
Alibaba’s spokesperson said the firm was “not a Chinese military company nor part of any military-civil fusion strategy.”
“We will take all available legal action against attempts to misrepresent our company,” said the spokesperson.
A spokesperson for Baidu said that “there is no credible justification” for its inclusion on the list and that it would “use all options available” to have its name struck off.
