Alibaba and WuXi AppTec shares fell after the US Department of Defense added them to its Chinese military companies list under Section 1260H.

The designation does not ban ordinary US investment or commercial dealings, but it can increase compliance, reputational, and policy risks.

The list is also tied to new US defense procurement restrictions that start in June 2026 and expand in June 2027. It may also signal tougher action by other US agencies.

Alibaba said it would take legal action, while WuXi AppTec, a Shanghai-based pharmaceutical research, development, and manufacturing services company, said the designation was a mistake.

Companies can seek reconsideration, and the Pentagon removed two companies from the list in December 2024.

For WuXi AppTec, the move adds to scrutiny in Washington. The company got 64% of its 2024 revenue from the US, while the proposed BIOSECURE Act also targeted WuXi AppTec and similar companies for limits on US federal contracting.

🔗 Source: South China Morning Post

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