China Condemns US Decision To Add Major Firms To Pentagon Watchlist

China has criticised the United States after several of its leading technology, automotive and renewable energy companies were added to a Pentagon list of firms that Washington alleges are linked to China’s military. Beijing described the move as unjustified and warned that it could take retaliatory measures if Chinese companies continue to face what it views as unfair treatment.

The latest development marks another point of friction in the increasingly complex relationship between the world’s two largest economies, despite recent efforts to maintain stability in trade relations.

Beijing Voices Strong Opposition

China’s Ministry of Commerce said it was “strongly dissatisfied” with the decision and firmly opposed the updated list released by the US Department of Defense.

In a statement, the ministry urged Washington to reverse the measures and return to what it described as a more constructive and stable path in bilateral relations.

“China is strongly dissatisfied and firmly opposes this,” the ministry said. It added that if Chinese companies are not treated fairly, Beijing would “inevitably retaliate resolutely and forcefully.”

China’s Foreign Ministry also expressed concerns over the Pentagon’s decision, which expands a list identifying companies that the United States believes are supporting China’s military development.

Major Chinese Companies Added

The updated list includes several of China’s most prominent technology and industrial companies.

Among the firms named are Alibaba Group, search engine operator Baidu, electric vehicle manufacturers BYD and NIO, as well as leading solar energy producers Trina Solar and JA Solar.

The revised designation replaces an earlier Pentagon list issued in early 2025 and reflects Washington’s growing focus on the relationship between China’s commercial technology sector and its military capabilities.

Security Concerns Drive US Policy

US officials have increasingly scrutinised Chinese companies that play important roles in advanced technologies, including artificial intelligence, renewable energy, semiconductors and electric vehicles.

The Pentagon’s list is intended to identify entities that the US government believes contribute to China’s military and industrial development. Although inclusion on the list does not automatically trigger sanctions, it can affect investor sentiment and increase regulatory scrutiny.

The update highlights broader US concerns regarding national security and technological competition with China, which has become a central issue in relations between the two countries.

Implications For Future Business

Under existing US law, the Department of Defense will be prohibited from entering into direct contracts with companies on the list. In addition, restrictions on purchasing products and services from those companies through third parties are scheduled to take effect from 2027.

While the measure primarily affects Pentagon procurement, designation on the list can have wider consequences for global business operations, investor confidence and corporate partnerships.

China argued that the move undermines progress made during recent diplomatic engagements. The Ministry of Commerce said the Pentagon’s action ignored understandings reached during a meeting between President Donald Trump and President Xi Jinping in Beijing last month, where both leaders sought to preserve a fragile trade truce.

Rising Strategic Competition

The dispute underscores the growing strategic competition between Washington and Beijing across technology, trade and national security.

As both governments continue to pursue policies aimed at protecting domestic industries and safeguarding national interests, tensions surrounding major technology firms are likely to remain a significant feature of the bilateral relationship.

For now, Beijing has stopped short of announcing specific countermeasures, but its warning signals the possibility of further escalation if additional Chinese companies are targeted by future US restrictions.

With inputs from Reuters