Claude Code's complicated China problem involves bans on both sides of the Pacific

Jul 3, 2026

Anthropic is trying to stop Chinese companies from accessing Claude Code, the Financial Times reports. The company's terms of service explicitly ban sales to companies controlled by China. But companies like Ant Financial and ByteDance are getting around the restrictions through cloud services, overseas subsidiaries in Singapore, or VPNs.

Meanwhile, Alibaba is banning its own employees from using Claude Code and requiring them to delete all Claude models, The Information reports. The ban follows reports of hidden code in Claude Code that could flag users based in China or linked to a Chinese lab. Anthropic's Thariq Shihipar called it an experiment from March to stop account abuse and distillation, adding that stronger safeguards have since replaced it.

Anthropic has previously accused Alibaba, DeepSeek, Moonshot AI, and MiniMax of using Claude for distillation, training their own smaller models on Claude's outputs.

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