Alibaba accuses Pentagon of ‘Chinese military company’ label
The Chinese tech giant Alibaba has initiated legal action against the US Department of Defence, seeking to be delisted from the Pentagon’s roster of Chinese military companies. This designation restricts access to US defence contracts and inflicts reputational harm. In the petition filed this week in the San Jose division of the US District Court in the Northern District of California, Alibaba argued that the designation, announced on June 8, has “no basis in fact or law” and that the Pentagon failed to reach its conclusion through any fair process. It represents the most recent legal action initiated by a Chinese firm against the Department of Defence concerning national security designations. In 2021, amid perceptions in Washington of an escalating military threat from China, Congress directed the department to compile a list of Chinese companies that are directly under the control of the Chinese military and security forces, along with those believed to have supported the nation’s defence industrial base.
The current list comprises 188 entities, encompassing state-owned defence enterprises as well as private-sector technology firms such as Alibaba and the robotics company Unitree. The designations have elicited protests from both the Chinese government and certain targeted companies. On Monday, Beijing declared sanctions against 10 American military-related companies, heightening the potential for increased tensions between the two nations at a moment when both Beijing and Washington are attempting to stabilise their relations. WuXi AppTec Co. has also been included in the list. According to the Pentagon, the company is “indirectly owned” by China’s state-owned Assets Supervision and Administration Commission. The Pentagon states that it is “indirectly affiliated” with the State Administration of Science, Technology and Industry for National Defence and the People’s Liberation Army.
WuXi AppTec is contesting the ruling in the federal district court located in the District of Columbia. In the petition submitted on June 11, the company asserted that the label has “already caused and will continue to cause several and irreparable harms.” It called the designation “the product of political pressure and inaccurate, unsupported assertions.” In a petition submitted on Tuesday, Alibaba articulated that the company is experiencing a decline in support from backers in the United States, emphasising that the repercussions are considerable due to its reliance on the trust of its American partners. The Pentagon asserts that Alibaba is affiliated with China’s Assets Supervision and Administration Commission and contributes to the nation’s industrial defence complex through its connection with China’s Ministry of Industry and Information Technology.
Alibaba stated in its petition that it is overseen by an independent board and does not possess any military certification or license. The company has stated that it has no relationship with the Assets Supervision and Administration Commission, emphasising that, similar to all companies operating in China, including those from the US, adherence to regulatory compliance with the ministry is obligatory. “A regulator is not an affiliate,” reads the petition. states the petition. A US judge last year ruled against DJI Technology, a Chinese drone maker, in its attempt to be removed from the Pentagon’s list. DJI is contesting the case.
