Washington lobbying firms are dropping Alibaba and Tencent as clients ahead of a Pentagon rule (Section 851 of the FY2025 NDAA) that bars defense contractors from employing lobbyists who also represent companies on the Pentagon's 1260H Chinese military companies list. Alibaba lost five lobbying firms and Tencent lost four after the Pentagon expanded its list to 188 entities on June 8. Alibaba has sued the Defense Department to be removed from the list, arguing the designation prevents it from retaining lobbyists needed to challenge the label. The rule effectively severs informal networks Chinese companies have used to navigate Washington, compounding other setbacks including Anthropic's accusation that Alibaba's Qwen AI lab harvested Claude's capabilities, and China's retaliatory trade curbs on 56 US firms.
