US move can't suppress growth of Chinese firms

The United States' recent move to suppress more Chinese companies will not affect the world's growing demand for Chinese-made solar panels, electric vehicles and industrial robots, which are both quality-oriented and cost-efficient, experts said.

Last week, the US Department of Defense updated its list of so-called Chinese military-linked companies under Section 1260H of the National Defense Authorization Act, bringing the total to 188 Chinese entities, including 80 parent companies.

The revision, submitted on June 8 and published two days later, expanded coverage beyond the traditional defense and infrastructure sectors into EVs, artificial intelligence, semiconductors, batteries, biotech, robotics and renewable energy.

New additions to the 1260H list include e-commerce giant Alibaba Group, carmaker BYD, robotics startup Unitree, optical enterprise Zhongji Innolight and electronics provider BOE. The list also names Chinese AI company SenseTime, battery maker CALB, solar manufacturer Trina Solar, biotech company WuXi AppTec and networking equipment maker TP-Link, among others.

The move does not directly restrict commercial operations in the US, but it prohibits the Pentagon's procurement from these listed entities and increases compliance risks across global supply chains.

Jin Zhen, an assistant researcher at Renmin University of China's Chongyang Institute for Financial Studies, said that the US appears to be expanding the list "to include companies with strong commercial competitiveness and technological capabilities, even when their primary businesses are civilian in nature".

She noted that some of the entities were added to the list just because they are China's "little giant companies", a national title bestowed upon small and medium-sized enterprises to encourage innovation. The US cited the title as one of the factors in assessing "potential military connections", which is obviously unreasonable, she said.

"As Chinese companies continue to grow, the US is increasingly seeking to limit their access to advanced technology, capital and market resources," Jin added.

Zhang Sinan, an independent commentator who has been following developments in international relations for years, said the US' recent move will not stop the world from needing "cheaper clean energy, more efficient EVs, more advanced drug development services and more flexible robotic applications", which are provided by China.

BYD said that there is "no legitimate basis" for its inclusion on the 1260H list, as the company is neither a Chinese military enterprise nor a military-civilian integration entity within China's defense industry.

Meanwhile, Alibaba said that it will take "all available legal measures" against any attempts to misrepresent its business or corporate identity.

Notably, 10 entities have been removed from the 1260H list, including subsidiaries of China Communications Construction and China National Offshore Oil Corp. After the list was first published in 2021, a group of Chinese companies filed federal lawsuits against the decision and won the cases.

chengyu@chinadaily.com.cn