An executive of a Chinese Communist Party (CCP)-linked battery manufacturer said Wednesday that his firm is eligible for American taxpayer subsidies despite increased scrutiny of his company.
Qian Cheng, executive vice president for Gotion High-Tech, made the remarks during a televised interview with CNBC on Wednesday. Numerous Republican lawmakers have called for the company’s U.S.-based subsidiary, Gotion Inc., to undergo a fresh Committee on Foreign Investment in the United States (CFIUS) review with the Treasury Department following numerous investigations by the Daily Caller News Foundation exposing the connections between the CCP and Gotion High-Tech, the China-based parent company.
“Can you confirm whether you are going to be under a CFIUS review, a security review?” an interviewer asked Cheng. “Are you eligible for taxpayer funding, and eligible for Inflation Reduction Act incentives?”
“Yes,” Cheng replied about the company’s eligibility, before detailing how the company’s sourcing is in compliance with the Inflation Reduction Act (IRA) and the support that the company has received from the Democrat-controlled governments of Michigan and Illinois. “We are pretty confident (in) our activities in the U.S.”
Gotion Inc. is poised to build battery factories in Michigan and Illinois, and its projects are poised to receive state subsidy packages and also stand to reap federal taxpayer dollars from tax credit provisions of the Inflation Reduction Act (IRA), if Cheng’s assessment is accurate. Its plant in Manteno, Illinois, could eventually reap more than $7 billion in IRA subsidies if it reaches its output projections on schedule, according to one analysis conducted by Good Jobs First.
“This is the latest example of the Peoples’ Republic of China-based and CCP-tied Gotion using every mechanism they can find to evade CFIUS. And this instance, it is a flagrant attempt through a carveout to dodge strict scrutiny and a thorough review via a Full Voluntary Notice,” Joseph Cella and Peter Hoekstra, former U.S. ambassadors and leaders of the Michigan-China Economic and Security Review Group, told the DCNF.
Gotion has numerous connections to the CCP; Gotion High-Tech established a joint venture company with a State Department-identified “Communist Chinese Military Company Subsidiary” in 2016.
Parent company Gotion High-Tech employed 923 active members of the Chinese Communist Party as of 2022, including CEO Li Zhen, the DCNF reported. Chuck Thelen, the vice president of North American manufacturing at Gotion Inc., asserted that the CCP has no presence in the North American branch of the company, Politico reported on Aug. 13.
CCP officials also established a talent recruitment “work station” at Gotion Inc.’s Fremont, California, headquarters in 2017, the DCNF reported. “Work stations” are a key tactic that CCP officials use to attract Western talent to work in the Chinese mainland.
Democratic Illinois Gov. JB Pritzker’s office has asserted that concern over Gotion Inc.’s activities is akin to “xenophobia.” Its new facilities in the U.S. will be within relatively close proximity to U.S. military sites, and there have been about 100 incidents of Chinese nationals accessing U.S. military sites in recent years, sometimes posing as tourists, The Wall Street Journal reported in September.
Gotion Inc. is listed as a Chinese foreign principal in filings with the Department of Justice, and separate Foreign Agent Registration Act paperwork discloses that Gotion Inc. is “wholly owned and controlled” by Gotion High-Tech, as reported by the DCNF.
Additionally, employees of Gotion High-Tech pledged CCP oaths and dressed as Red Army soldiers during company excursions, the DCNF has reported. Numerous Gotion High-Tech employees wore matching Red Army uniforms while swearing to “fight for communism to the end of my life.”
The Treasury Department, Gotion Inc. and Gotion High-Tech all did not respond immediately to the DCNF’s requests for comment.
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