The US has expanded its list of China companies reported to have ties with the Chinese military, including technology giant Alibaba and electric car maker BYD. The primary motive behind the Defense Department’s action is to alert American organizations to the risks of doing business with these firms.

Their inclusion primarily does not mean they face immediate sanctions. According to the BBC, Alibaba’s spokesperson said that there is no basis for their company being listed.

The Section 1260H was initially announced in a post on Monday including some of China’s most prominent companies. Most importantly, the designation marks a significant move by Washington that risks geopolitical tensions with Beijing. 

The Pentagon list now includes 188 Chinese military companies that are directly or indirectly involved in the US while allegedly supporting the military-civil fusion strategy.

It has been observed that some businesses are in direct competition with major American companies in key industries like electric vehicles and artificial intelligence.

According to policy analyst Stefanie Kam from the Nanyang Technological University, Beijing will likely view the significant move as a “form of economic containment.”

He further noted that China could address sanctions by placing American firms to prepare a list or by launching a major diplomatic push.

The list further implies that Alibaba, BYD and tech giant Baidu were among the prominent companies accused of contributing to Chinese defense operations and military-civil fusion strategy.

In this regard, Alibaba’s spokesperson said: “The firm is 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.” further added.

The Pentagon stated that BYD and Baidu are under the same Chinese ministry that mandates China's technology and industrial policies. BYD is a market leader in the global vehicle market, and 

Trump stated that he would welcome Chinese carmakers such as BYD if they built manufacturing plants in the US and recruited American workers.

The 1260H list currently incorporates 188 Chinese entities spanning across various sectors including aviation, semiconductors, shipping, communications, computer hardware, and artificial intelligence.