The 2026 1260H List Expands to 188 Companies: The U.S. Locks the PLA's Military-Civil Fusion at the End of the Supply Chain

When the U.S. Department of Defense updated the 1260H "Chinese Military Companies" list on June 8, what caught my attention was not the names like Alibaba, Baidu, or BYD themselves, but rather the shift in logic from "who is making weapons" to "who is providing components, algorithms, computing power, and manufacturing capabilities for future battlefields." According to media statistics, this list has expanded to 188 companies, with new or re-listed enterprises spanning electric vehicles, power batteries, cloud computing, artificial intelligence, storage chips, lidar, robotics, display panels, and biotechnology. In simple terms, the U.S. is not focused on a specific military vehicle or drone, but rather on those industrial nodes within China's military-civil fusion system that can be called upon for military needs.

The Real Change in the List is in Industry Distribution

The documents released by the U.S. Department of Defense clearly categorize several companies as "contributing to the military-civil fusion of China's defense industrial base." Alibaba is said to have an indirect connection with the State-owned Assets Supervision and Administration Commission (SASAC) and was listed due to its association with the Ministry of Industry and Information Technology (MIIT); Baidu's reasoning also primarily points to its connections with SASAC and MIIT; BYD is described as being related to SASAC, MIIT, and the military-civil fusion enterprise zone. Changxin Storage appears on the list, and Yangtze Memory Technologies has also been identified by the media as a storage chip company of interest in this round. Companies like Yushutech, Hesai, RoboSense, and DJI are closer to unmanned systems and perception chains, making their logic easier to understand: the robot body, lidar, flight control, and low-cost sensors are all fundamental components for transitioning unmanned combat from prototypes to mass deployment.

• Computing Power and Algorithm Layer: Alibaba Cloud, Baidu AI, SenseTime, CloudWalk, Megvii, etc., represent data processing and model training capabilities.
• Perception and Unmanned Layer: Hesai, RoboSense, Yushutech, DJI, XAG, etc., correspond to lidar, robotics, drones, and autonomous navigation.
• Manufacturing and Energy Layer: BYD, CATL, Zhongchuangxin Hang, EVE Energy, BOE, etc., cover batteries, vehicles, displays, and electronic manufacturing.
• Semi-conductor Layer: SMIC, Changxin Storage, etc., indicate that the U.S. still views chip manufacturing and storage as the foundation of military industry.

This is Not Sanction, but More Like a Warning Radar than Traditional Sanctions

The 1260H list itself does not equate to comprehensive financial sanctions. According to U.S. media and legal interpretations, it primarily restricts these companies from doing business with the U.S. Department of Defense, and it will also affect capital markets, government procurement, and compliance reviews. The issue is that many companies are genuinely concerned not about losing a Pentagon contract today, but about being labeled as "potential high-risk entities" by banks, funds, suppliers, and overseas clients tomorrow. This is like a radar lock; missiles have not yet been launched, but flight paths must already be recalculated.

Corporate responses must also be included in the analysis. Alibaba publicly stated that there is no reason for it to be included on the list, denying that it is a Chinese military company or part of the military-civil fusion strategy, and indicated it would take legal action; Baidu also denied the related accusations. I believe these denials cannot simply be viewed as public relations rhetoric. Many of the reasons listed in the U.S. Department of Defense documents are institutional clues such as "associated with the MIIT," "located in the military-civil fusion enterprise zone," and "small giants or single champions," rather than publicly displayed military contracts. In other words, the evidence threshold in the U.S. is shifting from "directly supplying the military" to "potentially absorbable by the military-industrial system." This is a troubling change for Chinese private enterprises, as many advanced manufacturing companies naturally participate in national-level industrial policy projects.

Implications for PLA Modernization

From the perspective of PLA modernization, this list actually proves a reality: the boundaries of modern military power are becoming increasingly blurred. In the past, when we discussed combat effectiveness, we easily focused on the J-20, Type 055 destroyers, and Dongfeng series missiles. Now, what truly determines the speed of continuous upgrades is whether storage chips can be stably supplied, whether battery energy density can continue to improve, whether low-cost robots can enter training grounds at scale, and whether automotive-grade sensors can be transformed into military reconnaissance and navigation modules. The performance of individual equipment is certainly important, but systematic warfare places greater emphasis on the depth of the industrial chain.

BYD's inclusion on the list is particularly interesting. It is not a traditional military enterprise, but its electric vehicle platform, blade batteries, power electronics, and large-scale manufacturing management can all be understood by the U.S. strategic community as potential military capabilities. My judgment is that the U.S. does not necessarily believe BYD is producing a certain military vehicle, but is concerned that China's learning curve in "civilian ultra-large-scale manufacturing" will allow military unmanned vehicles, logistics electrification platforms, and energy storage systems to reduce costs more quickly. This concern has its technical logic, but it can also be easily exaggerated.

The Shortcomings of Chinese Military Industry Have Not Been Addressed by the List

We need to be a bit more rational: being named by the U.S. does not mean these companies can seamlessly transform into PLA combat capabilities. A robotics company may be able to create a flexible quadruped platform, but that does not mean it can solve battlefield communication interference, low-temperature high-dust reliability, and mass maintenance; a cloud computing company may have computing power, but that does not mean the military data closed loop has been established; mass production of storage chips does not mean that advanced processes, EDA tools, and high-end equipment pressures have disappeared. The most challenging aspect of military-civil fusion is not whether "private enterprises have technology," but rather the integration costs after technology enters military procurement, training, tactics, and support systems.

This is also a reservation I have regarding this list. The broader the scope the U.S. pulls, the more compliance pressure it can create, but it also becomes easier to mix normal industrial policies with military uses. For China, the real challenge is not how to refute the labels of each company, but how to transform civilian advantages in semiconductors, robotics, batteries, and AI into verifiable, maintainable, and mass-producible military capabilities under increasingly severe external blockades. The next unanswered question is: if the U.S. continues to use "association with the MIIT" as a judgment criterion, how many of China's advanced manufacturing enterprises can still maintain open channels for technology and capital in the international market?

Main Sources

This article synthesizes the 1260H list document released by the U.S. Department of Defense on June 8, reports from the South China Morning Post on June 9, The Guardian on June 9, and corporate public responses.