Alibaba sues Pentagon over inclusion on Chinese military companies list

Chinese technology company Alibaba has filed a lawsuit against the U.S. Department of Defence, seeking to overturn its inclusion on the Pentagon’s list of Chinese military companies, a designation that bars firms from securing US defence contracts and can negatively affect their reputation.

In a complaint submitted to the US District Court for the Northern District of California, Alibaba argued that its designation, announced on June 8, lacks both factual and legal justification and was made without a fair review process, Caliber.Az reports, citing the AP.

The case marks the latest legal challenge by a Chinese company against the Pentagon’s national security classifications.

Congress directed the Defence Department in 2021 to compile a list of Chinese firms believed to be owned, controlled, or linked to China’s military and defence sector. The current list includes 188 entities, ranging from state-owned defence enterprises to private technology companies such as Alibaba and robotics manufacturer Unitree.

The designations have prompted objections from Beijing and several affected firms.

Earlier this week, China imposed sanctions on 10 U.S. military-related companies, a move that could further strain relations between the two countries despite ongoing efforts to stabilise ties.

Another company on the Pentagon’s list, WuXi AppTec, has also launched legal action. The pharmaceutical research and manufacturing services provider argues that the designation has caused significant and ongoing harm to its business and reputation.

In its filing, Alibaba said the label has already damaged its standing among American partners and investors, stressing that confidence and trust are critical to its operations in the U.S. market.

The Pentagon claims Alibaba is connected to China’s State-owned Assets Supervision and Administration Commission and contributes to the country’s defense industrial base through ties to the Ministry of Industry and Information Technology.

Alibaba rejected those allegations, stating that it is governed by an independent board, possesses no military licenses or certifications, and has no affiliation with the state-owned assets regulator. The company also argued that compliance with Chinese government regulations is mandatory for all businesses operating in China, including foreign firms.

“A regulator is not an affiliate,” reads the petition.

Meanwhile, Chinese drone manufacturer DJI continues to appeal a court ruling issued last year that upheld its inclusion on the Pentagon’s list.

By Bakhtiyar Abbasov