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US removes updated list of companies allegedly aiding China’s military

After posting a list on Friday, the 'United States' removed it shortly thereafter. The updated list included some of China's biggest tech companies including Baidu and Alibaba.

The document was posted for an hour and removed China's two largest memory chipmakers, CXMT, and YMTC, from the list. This drew criticism from China hawks who feared that the chipmaking skills of these companies would help China supercharge its military.

The Pentagon wrote to the Federal Register (the official journal of the U.S. Government) without giving a specific reason, "We would like this notice removed from public inspection and withdrawn from publication in the Federal Register."

The Pentagon and?White House didn't immediately respond to comments. The Chinese Embassy in Washington didn't immediately respond to an inquiry for comment.

Chris McGuire, a White House National Security Council Official under President Joe Biden said, "Hopefully (the Pentagon) has pulled?the documentation because removing CXMT was an error." He added that this would 'only make sense' given the addition of other companies crucial to the Chinese AI stack like Alibaba and Baidu to the list.

The document was withdrawn on Friday, but other additions included BYD automaker, WuXi AppTec biotech firm and RoboSense Technology Co Ltd. AI-driven robotics company. The list was published and then quickly withdrawn by the?administration of President Donald Trump to avoid antagonizing China after a trade truce between Chinese President Xi Jinping in October and Trump.

Since then, the administration's stance on China has softened. The administration gave Nvidia the green light to export their second-most sophisticated AI chips to China, and it postponed an order that would have prohibited thousands of Chinese companies from purchasing U.S. tech. The administration reportedly shelved several national security measures that were aimed at Beijing. These included a ban on China Telecom’s U.S. operation and restrictions on the sale of Chinese equipment to U.S. data centers. Trump is expected in China by April. However, the dates of his visit are still to be determined.

The Pentagon list doesn't formally sanction Chinese companies, but a new law will prevent the Department from procuring or contracting with firms on the list in the coming years.

The inclusion of a firm on the list sends a message about the U.S. Military's view of that company to Pentagon suppliers as well as?other U.S. Government agencies. Some of these firms have even sued the United States for their inclusion.

Alibaba's spokesperson threatened legal action and said that there was no reason for the inclusion of its products.

The spokesperson said that "Alibaba does not belong to any Chinese military company or be part of any military/civil fusion strategies".

List already includes Chinese companies such as Tencent Holdings - one of China's biggest tech companies - and CATL – a major battery manufacturer in the electric car industry.

This appears to be an interagency issue related to the approval of some?of these companies that are being removed, said Eric Sayers. He is a nonresident fellow at the American Enterprise Institute and specializes in Asia-Pacific Defense Policy and U.S.-China Technology Policy.

Sayers stated that "my view is the new additions will not change. However, a few removals appear to be under review and may remain on the updated listing."

(source: Reuters)