Alibaba order highlights firms' challenges in US

China's Alibaba Group has won a preliminary injunction from a United States court that ordered the US government not to deny Pentagon contracts to companies solely because they, their parent companies or subsidiaries do business with firms that lobby for the e-commerce giant, in yet another example of a Chinese company legally challenging unilateral and discriminatory US business restrictions.

US District Judge Eumi K. Lee granted Alibaba the preliminary injunction on Monday.

The Pentagon had argued that the ban would protect sensitive military information and prevent improper influence. The court said the Pentagon's evidence was insufficient to justify restricting political speech.

In a lawsuit filed in June, Alibaba sought its removal from a US Defense Department list of entities allegedly linked to China's military. The group said that it has no military ties and is not part of any military-civil fusion strategy.

The Monday injunction suspended the restriction stemming from Alibaba's designation but did not decide whether the company should remain on the list.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said that national security has become a "catch-all" justification for US business restrictions. He added that the ultimate goal for such lists is to undermine competitive Chinese products and protect US domestic industries.

A number of Chinese companies have already secured favorable US court rulings.

Chinese pharmaceutical research and manufacturing services group WuXi AppTec secured a preliminary injunction in August, blocking the US Defense Department from enforcing its designation as a Chinese military company under Section 1260H while litigation continued.

Chinese lidar manufacturer Hesai Technology also won an important appeal in August. The US Court of Appeals for the District of Columbia Circuit required the government to provide procedural protections.

In 2021, Chinese tech company Xiaomi Corp secured a final court order, vacating its designation on the Pentagon's earlier Chinese military companies list.

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said: "In such cases, Chinese companies were seeking to guard their equal rights, not legal privileges, on the global stage."