Against the backdrop of escalating competition between the United States and China, the U.S. tends to prioritize national security over economic interests when dealing with its relations with China. Chinese investments in the U.S. market are facing increasing scrutiny and resistance.
In 2022, Michigan Governor Gretchen Whitmer welcomed a Chinese lithium-ion battery company’s plan to build a $2.36 billion factory in Big Rapids. The project was hailed as the “largest economic development project in northern Michigan’s history,” expected to bring thousands of job opportunities.
The Michigan Economic Development Corporation told the Associated Press that the project had received “bipartisan support” as it was projected to create up to 2,350 job positions.
Now, the project undertaken by Gotion High-Tech, a subsidiary of China’s Hefei Guoxuan High-Tech Energy Power Co., is facing skepticism and challenges from U.S. legislators and local residents.
Republican Congressman John Moolenaar from Michigan, chairman of the House China Task Force, was the first to accuse this Chinese company of being involved in forced labor, expressing concerns that the company might engage in spying activities for the Chinese government and expand China’s influence in the U.S. heartland.
On March 25 of this year, House Speaker Mike Johnson appointed Moolenaar as the new chairman of the United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, replacing Republican Congressman Mike Gallagher who resigned early.
Regarding China-related issues, Moolenaar has advocated for a tougher stance on policies. One of his major concerns is the plan of Gotion High-Tech’s American subsidiary to build a battery material factory in Mecosta County, Michigan, leading the opposition against the project.
According to Voice of America, Moolenaar and former China Task Force chairman Gallagher jointly wrote to Treasury Secretary Janet Yellen last September, urging the Biden administration to halt aid to Chinese battery companies in the U.S., specifically mentioning Gotion High-Tech.
In their letter, Moolenaar and Gallagher stated, “Gotion High-Tech is a Chinese company directly connected to the Chinese Communist Party and its state-owned financial institutions, actively participating in the Chinese version of the ‘Thousand Talents Plan,’ establishing multiple ‘Communist Party units’ within its business scope, openly seeking support from various Chinese provincial governments to further their overseas business expansion attempt.”
When congressional staff discovered a link between the Chinese company and the Xinjiang Production and Construction Corps, Moolenaar accused the company of using forced labor. The Xinjiang Production and Construction Corps is a quasi-military organization that has been sanctioned by the U.S. Commerce Department for its involvement in forced labor in China.
Gotion High-Tech denied these allegations, stating that the accusations of forced labor were “completely false,” and allowing this Chinese company to build a factory in Michigan would help “introduce a leap in technology that has been achieved overseas in the U.S.”
Recently, Moolenaar stated during a roundtable discussion in Michigan, “I want to see more job opportunities and investment in this area, but we should not welcome companies controlled by those who view us as enemies and should not allow them to build factories here.”
Moolenaar has campaigned against the Gotion High-Tech project in his congressional district, saying, “Can you imagine working for an American company tirelessly developing battery technology only to find out your taxes are being used to subsidize a competitor from China?”
The Michigan Governor’s office said that in 2022, Michigan outbid several other states in attracting Gotion High-Tech. Michigan aims to revitalize its manufacturing base by offering a package of incentives, including a $175 million grant and approval of a new zone that would save the company $540 million. Local towns had approved tax breaks for Gotion High-Tech to establish a factory producing electric vehicle battery components.
Currently, Moolenaar is garnering support for a bill that would prevent Gotion High-Tech from receiving federal subsidies.
Given the project’s ties to China, residents of Green Charter Township, Michigan, ousted five officials who supported the project in a recall election last year. The new board has withdrawn its support for the project and repealed an agreement to extend water supply to the factory site.
Similarly, in Michigan, Ford’s partnership project with another Chinese battery manufacturer, Contemporary Amperex Technology Ltd. (CATL), faced opposition due to its potential association with the ruling party in China and has been downsized.
In Worcester, Massachusetts, Chinese biotechnology company WuXi Biologics halted construction of a large facility. Weeks ago, legislators introduced a bill. For data security considerations, the bill would prohibit U.S. entities receiving federal funds from doing business with certain companies associated with China, including WuXi Biologics.
The bipartisan House China Task Force warned that widespread adoption of Chinese-developed technology in the U.S. could threaten America’s long-term technological competitiveness.
In the Senate, Senator Marco Rubio stated in a hearing in July that China is not only a military and diplomatic adversary to the U.S. but also a “technological, industrial, and commercial” adversary.
The Republican from Florida emphasized that “Technological and industrial dominance has always been at the forefront of global power.” He believed that U.S. foreign policy should consider America’s commercial, trade, and technological interests.
Furthermore, as the Biden administration seeks to revitalize American manufacturing and enhance U.S. technological capabilities, many in politics believe that Chinese companies should be kept at arm’s length.
Data from the U.S. Bureau of Economic Analysis shows that Chinese investments in the U.S. (including acquisitions, new business establishments, and expansions) dropped from a peak of $63 billion in 2017 to slightly below $44 billion in 2023, despite an increase from $5.31 billion in 2022 to $6.21 billion in 2023. Compared to the peak of $27 billion in 2016, there has been a significant decline.