Alibaba Challenges U.S. Defense Department Over Military Company Designation
The ongoing tensions between U.S. authorities and Chinese companies have taken a new turn with Alibaba’s recent legal action. The tech giant has filed a lawsuit against the U.S. Department of Defense, urging the removal of its name from a list that bars Chinese military companies from securing U.S. defense contracts.
In a petition submitted to the U.S. District Court in Northern California’s San Jose division, Alibaba argued against the Pentagon’s designation announced on June 8. The company claims that the decision lacks factual and legal grounds and that it was reached without a transparent process.
This lawsuit is the latest in a series of legal challenges from Chinese firms against the Pentagon’s national security labels. In 2021, amid rising concerns about China’s military threat, Congress tasked the Department of Defense with identifying companies under Chinese military influence or those bolstering China’s defense capabilities.
The current list, which has drawn protests from China and affected companies, includes 188 entities ranging from state-owned defense firms to private tech companies like Alibaba and Unitree. Beijing’s recent sanctions on 10 U.S. military-related companies have further strained the delicate balance as both nations aim to stabilize relations.
Another company, WuXi AppTec Co., has also been included in this list. This firm provides services to numerous U.S. pharmaceutical and life sciences companies. The Pentagon links WuXi AppTec to China’s state-owned Assets Supervision and Administration Commission and suggests affiliations with the State Administration of Science, Technology and Industry for National Defense as well as the People’s Liberation Army. WuXi AppTec is contesting this designation, deeming it a result of political pressure and unsubstantiated claims.
Alibaba, in its recent petition, highlighted the adverse impact of this label on its U.S. partnerships, emphasizing its independent governance and lack of military engagement. The company clarified that compliance with China’s Ministry of Industry and Information Technology is a standard requirement for all businesses, including those owned by U.S. investors. “A regulator is not an affiliate,” the petition asserts.
This legal tussle follows a previous case where DJI Technology, a Chinese drone manufacturer, lost its appeal to be removed from the Pentagon’s list. DJI is now pursuing further legal action.
