China's WuXi sues US over allegations it supports Beijing's military

By Nikita Maria Jino, Kumar Tanishk ‌and Jonathan Stempel

June ​11 (Reuters) - A ​Chinese biotechnology company sued the U.S. government on Thursday over being placed on a list of businesses from China that the U.S. Department of Defense has linked to that ‌country's military.

WuXi AppTec filed its complaint in the Washington, D.C., federal court, calling ⁠its inclusion on the list arbitrary, capricious, unsupported by the facts and "the product of political pressure."

It also accused the U.S. government ‌of inflicting substantial reputational and operational ‌harm by branding it a national security threat without any legal or factual basis.

The lawsuit seeks WuXi's removal from the list.

A Pentagon spokesperson said the agency does not discuss pending litigation.

U.S. EXPANDED ​BLACKLIST

WuXi's lawsuit came three days after the Pentagon expanded its blacklist to 188 companies, reflecting concern that China's military could tap that country's private sector for advancements, amid elevated geopolitical tensions between ⁠Beijing and Washington.

It also came less than one month after U.S. President Donald Trump met China's Xi Jinping in Beijing, with the two leaders maintaining a ​delicate truce on trade issues.

Under recent U.S. law, the Defense Department cannot contract with companies on the list starting later this month, and cannot buy their ​products or services via third parties beginning in 2027. Inclusion ‌on the list does not mean formal sanctions.

Other businesses added to the list this week include e-commerce company Alibaba, internet search company Baidu and automakers BYD ⁠and NIO. The list is updated at least annually, and businesses can petition for removal.

'COMPANY OF CONCERN' LABEL COULD FOLLOW

According to the Pentagon, WuXi's inclusion reflected the company being owned indirectly by China's state asset regulator, known as SASAC, ⁠and affiliated indirectly with the People's Liberation Army and a civilian government agency that handles defense matters, known as ​SASTIND.

The listing opens the door to WuXi being labeled a “company of concern” under the Biosecure Act, a law Trump signed in December that restricts federal agencies' business dealings with non-U.S. biotechnology companies.

WuXi rejected the Defense Department's accusations before suing. "We ‌want to be absolutely clear: WuXi AppTec is not a Chinese military company," the company's leaders said in a letter to customers.

Founded in 2000, WuXi said ‌it provides research, development and manufacturing services to more than 4,000 pharmaceutical and life-sciences companies, including more than ⁠1,200 customers in the United States. Its ‌market value is about $43 billion, Reuters ​data shows.

(Reporting by Nikita Maria Jino and Kumar Tanishk in Bengaluru, Jonathan Stempel in New York, and Alexandra Alper in Washington; diting by Devika Syamnath, Sahal Muhammed and ‌Matthew Lewis)

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