Chinese Tech Stocks Under Pentagon Review: Investor Implications
The Pentagon has flagged Alibaba Group (BABA), Baidu (BIDU), and BYD Co. (BYDDF) for potential inclusion on the Section 1260H watchlist, citing alleged ties to Chinese military activities. While the designation carries no direct penalties, it serves as a cautionary signal to investors and U.S. partners. The timing of the October 7 letter from Deputy Defense Secretary Stephen Feinberg—weeks before the Trump-Xi trade truce—hints at simmering geopolitical tensions.
Alibaba swiftly denied the claims, asserting it has no military affiliations or participation in civil-military programs. The company emphasized its lack of engagement with the U.S. defense sector, questioning the rationale for its inclusion. Market watchers are weighing the risk of renewed U.S.-China friction against the backdrop of these developments.
