Pentagon Says U.S. Defense Agencies Can’t Do Business With BYD, Alibaba, or Baidu

The U.S. Defense Department announced today (Wednesday) that three Chinese companies—BYD, Alibaba, and Baidu—are in effect Chinese military companies. As a result, the Pentagon issued a decision barring American companies from doing business with them.

According to a report by 12N, these companies were added to a list of about 200 firms defined as connected to China’s military. The claim is that the companies help the Chinese government harness civilian technology for military purposes.

American defense branches will be prohibited from contracting with the companies starting at the end of the month. In about a year, the Pentagon will also prohibit contracts with American companies that use these Chinese firms as suppliers. The decision does not include a ban on American consumers buying from the Chinese companies or using their services.

According to the "Financial Times," the companies added to the list rejected the American allegations that they assist China’s military. Alibaba announced that it would take legal action. Baidu said the accusation was "completely baseless," and BYD stated that there was "no justification" for its inclusion. The Chinese government also responded sharply: a spokesperson for the embassy in Washington called on the U.S. to "stop this wrong practice and create a fair environment for Chinese companies."