China struck back June 22 against the U.S. Defense Department’s expansion of its “Chinese military companies” (1260H) list, with two ministries moving against a combined 56 American firms. The Ministry of Commerce added 10 U.S. entities to its export-control list, preventing Chinese exporters—and anyone worldwide handling China-made goods—from supplying them with dual-use items. Hours later, the Ministry of Finance excluded 46 U.S. companies from Chinese government procurement. These companies can no longer be hired to provide services to the Chinese government.
A Ministry of Commerce spokesperson said the measures were a response to “malicious actions” by Washington—specifically the Pentagon’s June expansion of the 1260H list, which had added Chinese national champions including Alibaba, Baidu, and BYD (see our June 11 report. The export-control list runs heavily to drones, sensors, and—pointedly—rare earths: it names drone-makers Red Cat Holdings, Teal Drones, and Jaia Robotics, sensor firm IMSAR, Ball Aerospace, Oshkosh Defense, L3Harris Maritime Services, and the two U.S. rare-earth ventures Washington has been promoting as alternatives to Chinese supply, MP Materials and USA Rare Earth. The procurement ban hits the defense giants—Lockheed Martin, Boeing’s defense arm, Raytheon, General Dynamics, and General Atomics among them—though it reportedly exempts U.S.-funded enterprises operating inside China.