By Michael Martina and Alexandra Alper
WASHINGTON, Feb 13 (Reuters) – The United States withdrew an updated list of Chinese firms allegedly aiding Beijing’s military shortly after it was posted on Friday with the addition of some of China’s biggest tech companies, including Alibaba and Baidu.
The document, which was posted for about an hour, also had removed China’s top memory chipmakers CXMT and YMTC from the list, drawing fire from China hawks in Washington who fear the growing chipmaking expertise of these companies could help supercharge China’s military.
“We would like to remove this notice from public inspection and withdraw the notice from publication in the Federal Register,” a Pentagon letter to the Federal Register, the official journal of the U.S. government, said without specifying a reason.
The Pentagon and the White House did not immediately respond to requests for comment. The Chinese embassy in Washington did not immediately respond to a request for comment.
“Hopefully, (the Pentagon) pulled the document because removing CXMT and YMTC was an error,” said Chris McGuire, a former White House National Security Council official under President Joe Biden, who said that would only make sense, given the addition to the list of many other companies critical to the Chinese AI stack, like Alibaba and Baidu.
Other additions on the withdrawn Friday document included automaker BYD, biotech firm WuXi AppTec and AI-driven robotics technology company RoboSense Technology Co Ltd.
The publication and hasty withdrawal of the list comes as President Donald Trump’s administration has sought to avoid antagonizing China following a trade truce reached by Chinese President Xi Jinping and Trump in October.
Since then, the administration has taken a softer line on China. It gave Nvidia a green light to export its second-most advanced AI chips to China and postponed a rule that would have barred thousands of Chinese firms from buying U.S. technology.
On Thursday, Reuters reported the administration had shelved a number of national security measures aimed at Beijing, including a ban on China Telecom’s U.S. operations and restrictions on sales of Chinese equipment for U.S. data centers.
Trump is expected to travel to China in April, though dates for the visit have yet to be set.
Though the Pentagon list does not formally impose sanctions on Chinese firms, under a new law, the department will be prevented in coming years from contracting and procuring from companies on the list.
Being added to the list also sends a message to Pentagon suppliers and other U.S. government agencies about the U.S. military’s opinion of the firms, some of which have sued the United States over their inclusion.
An Alibaba spokesperson said there was no basis for its inclusion and threatened legal action.
“Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” the spokesperson said.
The list already includes major Chinese firms such as Tencent Holdings, one of China’s largest tech companies, and CATL, a major battery maker in the electric vehicle industry.
“This appears to be a process issue tied to interagency sign-off on some of the companies being removed,” said Eric Sayers, a nonresident fellow at the American Enterprise Institute who specializes in Asia-Pacific defense policy and U.S.-China technology policy.
“My view is that the new additions are unlikely to change, but a few removals still appear under review and could remain on the updated list,” Sayers said.
(Reporting by Michael Martina, Alexandra Alper and Karen Freifeld; editing by Philippa Fletcher, Nick Zieminski, William Maclean, Will Dunham and Chizu Nomiyama)
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