© Reuters. FILE PHOTO: The flags of the United States and China fly from a lamppost in the Chinatown neighborhood of Boston, Massachusetts, U.S., November 1, 2021. REUTERS/Brian Snyder//File Photo
By Idrees Ali and Michael Martina
WASHINGTON (Reuters) -The United States added more than a dozen Chinese companies to a list created by the Defense Department that highlights entities that are alleged to work with Beijing’s military, a U.S. official said on Wednesday.
New additions to the list include memory chip maker YMTC, artificial intelligence company Megvii, lidar maker Hesai Technology and tech company NetPosa.
While being placed on the “Section 1260H” list doesn’t involve immediate bans, it carries significant reputational risk for the designated companies and represents a stark warning to U.S. entities about the risks of conducting business with them. It could also add pressure on the Treasury Department to sanction the companies.
In addition, the 2024 National Defense Authorization Act added some teeth to the list, prohibiting the Defense Department under Section 805 of the law in coming years from contracting with any of the designated companies.
The updated list is expected to be made public this afternoon, another U.S. official said.
Chinese embassy in Washington did not immediately respond to a request for comment.
“The Defense Department’s updated 1260H list underscores China’s unwavering commitment to its military-civil fusion strategy,” said Craig Singleton, a senior fellow at the non-partisan Foundation for Defense of Democracies.
“Being listed on 1260H poses major reputational risks to Chinese companies,” he added, noting some Chinese firms have tried to be removed from the list.
Other firms added on Wednesday include China Three Gorges Corporation, China Construction Technology Co and Yitu Network Technology.
They join aviation company AVIC, BGI Genomics Co, China Mobile (NYSE:), energy company CNOOC (NYSE:) and China Railway Construction Corporation Limited (CRCC).
