The 1260H List Expanded to 188 Companies: Alibaba, BYD, and Baidu Included, Exposing U.S. Focus on China's Military-Civilian Dual-Use Supply Chain

On June 13, the Chinese Ministry of Commerce responded to the U.S. Department of Defense's expansion of the so-called list of Chinese military companies, expressing strong dissatisfaction and firm opposition. This response itself is not surprising; what is truly interesting is the structure of the list. This time, the U.S. is not only targeting traditional military industrial groups like AVIC, CSSC, and the China Ordnance Industry Group, but has also included companies that appear to be more civilian-oriented, such as Alibaba, Baidu, BYD, Yushu Technology, Hesai, Changxin Memory, Yangtze Memory, BOE, and WuXi AppTec, into the same framework.

What the Changes in the List Indicate

According to the 1260H document released by the U.S. Department of Defense on June 8, the logic for determining the list mainly falls into three categories: first, companies that have direct or indirect connections with the State-owned Assets Supervision and Administration Commission, the Ministry of Industry and Information Technology, the defense science and technology system, or the People's Liberation Army; second, those considered to be involved in military-civilian integration industrial zones, specialized and innovative small giants, or manufacturing champions; third, those operating directly or indirectly in the U.S. Foreign media statistics show that the new list has expanded from 134 companies in 2025 to 188, and starting at the end of June, it will affect eligibility for U.S. defense contracts.

In simple terms, what the U.S. is looking at now is not whether a company manufactures missiles, but whether its technology can enter the future equipment chain of the PLA. Cloud computing, autonomous driving algorithms, lidar, robotic joints, batteries, display panels, biological sequencing, and advanced storage are all typical dual-use technologies. Military factories cannot produce all components themselves; modern weapon systems increasingly resemble a large supply chain project.

Military Scenarios Corresponding to the Named Companies

• Alibaba and Baidu: Cloud platforms, AI training, mapping, and autonomous driving data, potentially corresponding to command and control, target recognition, and logistics scheduling.
• BYD, CATL, and EVE Energy: Battery and electric drive technologies, related to unmanned vehicles, unmanned boats, field energy storage, and distributed power sources.
• Yushu, SUTENG, and Hesai: Robotics and lidar, closely related to ground unmanned systems and low-cost perception chains.
• Changxin, Yangtze Memory, and BOE: Storage chips and display components, which are essential parts that cannot be avoided after equipment becomes electronic.

The author believes that this list from the U.S. actually acknowledges a fact: the bottleneck in China's military modernization is no longer just in traditional assembly plants, but in whether high-end civilian manufacturing can be stably converted into military capabilities. In the past, discussions about PLA modernization often focused on the J-20, the Fujian aircraft carrier, and the Dongfeng series; however, what truly determines production capacity flexibility may be battery factories, sensor manufacturers, and industrial software teams.

The Impact Should Not Be Overstated

The 1260H list is not a direct sanction and is not the same as an entity list or investment ban. Its most direct effect is to exclude the relevant companies from U.S. defense procurement and create reputational and compliance pressure. Companies like Alibaba and Baidu have denied military connections, and some companies may continue to pursue legal means. This detail is important because, without subsequent restrictions from the Treasury Department, the Commerce Department, or Congress, the list itself has limited destructive power.

However, it should not be viewed purely as a symbolic gesture. The U.S. defense supply chain is undergoing a process of decoupling from China, especially in areas such as drones, power batteries, optoelectronic sensors, and pharmaceutical R&D outsourcing. The 1260H list effectively draws a risk line for U.S. companies and allied procurement departments: in the future, any cooperation involving advanced Chinese manufacturing may be questioned with, "Will this support the PLA in return?"

The Real Pressures on China's Military Industry

From China's perspective, the short-term loss may not be in orders, but in increased friction regarding international financing, overseas mergers and acquisitions, talent cooperation, and high-end equipment procurement. Chinese companies can claim they are not military enterprises, which is often true; however, in the U.S. narrative, as long as a company is within the industrial policies of the Ministry of Industry and Information Technology, local military-civilian integration parks, or key technology chains, it may be classified as part of the military potential pool.

This is also a point of concern for Li Minghui: if all high-end manufacturing is labeled as military-civilian integration, Chinese companies going abroad will increasingly feel like they are running with a compliance burden. The real issue is not whether Alibaba or BYD will produce equipment for the PLA tomorrow, but whether China can still dilute military technology costs in the global market using civilian scale in the future. This question currently has no answer.

Main Sources

U.S. Department of Defense 1260H List PDF, June 8, 2026; Global Times, June 13, 2026; Al Jazeera, June 9, 2026; Associated Press, June 9, 2026.