The United States on Wednesday added more than a dozen Chinese companies to a list created by the Defense Department to highlight firms it says are allegedly working with Beijing's military, as part of the broader effort to keep American technology from aiding China.
Amid strained ties between the world's two biggest economies, the updated list is one of numerous actions Washington has taken in recent years to highlight and restrict Chinese companies that is says may strengthen Beijing's military.
While being placed on the list doesn't involve immediate bans, it can be a blow to designated companies' reputations and represents a stark warning to U.S. entities and companies about the risks of conducting business with them. It could also add pressure on the Treasury Department to sanction the companies.
In addition, the 2024 National Defense Authorization Act added some teeth to the "Section 1260H" list, prohibiting the Defense Department under Section 805 of the law in coming years from contracting with any of the designated companies.
YMTC, Megvii and Hesai did not immediately respond to requests for comment. The Chinese embassy in Washington did not immediately respond to a request for comment.
"The Defense Department's updated 1260H list underscores China's unwavering commitment to its military-civil fusion strategy," said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies.
"Being listed on 1260H poses major reputational risks to Chinese companies," he added, noting that some Chinese firms have tried to be removed from the list.
Other firms added on Wednesday include China Three Gorges Corp, China Construction Technology Co and Yitu Network Technology, as well as publicly traded companies Chengdu JOUAV Automation Tech Co (688070.SS), Chengdu M&S Electronics Technology Co (688311.SS), Guizhou Aviation Technical Development Co (688239.SS), and ShenZhen Consys Science & Technology Co (688788.SS).
They join previously listed aviation company AVIC, BGI Genomics Co, China Mobile (0941.HK), energy company CNOOC (600968.SS) and China Railway Construction Corp (601186.SS).
Separately on Wednesday, senior U.S. officials, including FBI Director Christopher Wray, warned that hackers linked to China's government are preparing to cause "real-world harm" by targeting critical U.S. infrastructure, such as water treatment plants, the electric grid, oil and natural gas pipelines, and transportation hubs.
