Alibaba and Baidu are expected to be included in the list of Chinese military enterprises. Alibaba claims it is baseless, and ADRs are still trading at a premium compared to Hong Kong stocks

According to foreign media reports, the Trump administration has added several Chinese companies, including Alibaba (9988), Baidu (9888), and BYD (1211), to the list of companies accused of providing assistance to the Chinese military, known as the "Section 1260H List." Alibaba's U.S. stock (BABA) once plummeted by 3.7%, later narrowing its decline to 1.6%; Baidu's U.S. stock (BIDU) fell by 5% at one point and is currently down 2.5%. Both stocks are trading at a premium compared to their Hong Kong counterparts. Alibaba: Legal Action Against Distortion of Image Alibaba responded by stating that the proposal to include it on the Section 1260H List is baseless, asserting that Alibaba is not a Chinese military enterprise and has not participated in any military-civil fusion strategy. The group indicated that it will take all feasible legal actions against any attempts to distort its image. WuXi AppTec and BYD Also Included in the List Reuters and Bloomberg cited sources reporting that other companies included in the military list are WuXi AppTec (2359), Soochow Securities Co., Ltd. (2498), and router manufacturer TP-Link, while semiconductor manufacturer Yangtze Memory Technologies has been removed from the list. U.S. Department of Defense May Ban Future Cooperation with Listed Companies If a company is included in the U.S. Department of Defense's "1260H List," it does not immediately equate to sanctions being imposed; however, under a new U.S. law, the Department of Defense will be prohibited from signing contracts or making purchases from the companies on the list in the coming years. Additionally, this move sends a clear message to suppliers of the U.S. Department of Defense and other U.S. government agencies, indicating the military's stance on these companies, prompting some companies already on the list to file lawsuits against the U.S. government. The List Already Includes Several Chinese Tech Giants The 1260H List was initially published in 2021 and currently includes over 130 Chinese entities, including well-known Chinese companies such as tech giant Tencent Holdings (700) and major global electric vehicle battery manufacturer Contemporary Amperex Technology Co., Limited (3750). Tencent clarified when it was added to the list that its business would not be affected and that it would initiate procedures to correct its erroneous inclusion; Contemporary Amperex Technology Co., Limited issued a statement indicating that the company is not engaged in any military-related activities. Since last December, several U.S. Congress members have written to the U.S. Secretary of Defense urging the Pentagon to add multiple Chinese tech companies to the list, including artificial intelligence company DeepSeek, smartphone manufacturer Xiaomi (1810), and electronic display manufacturer BOE Technology Group