AMAC Exclusive – By Neil Banerji
As many Republican-led states move to restrict companies with ties to the Chinese Communist Party (CCP) from setting up shop in their states, Michigan Democrats are moving in the opposite direction and welcoming CCP-linked firms.
The most recent major development came last month as Chinese battery manufacturer Gotion Inc., a subsidiary of Gotion High-Tech Co., based in Hefei, China, announced that it had secured final approval to move forward on a $2.4 billion manufacturing plant in Mecosta County, about an hour north of Grand Rapids. To bring in the investment, the Michigan State Senate Appropriations Committee voted to allocate $175 million for the project, with at least $650 million more expected in the coming years.
Notably, a number of Democrats on the committee broke with their own party and joined Republicans in voting against the project, citing concerns about Gotion’s links to the CCP. Critics have pointed specifically to a section in the charter of Gotion’s parent company which stipulates Gotion and all its subsidiaries must “set up a Party organization and carry out Party activities in accordance with the Constitution of the Communist Party of China… the Company shall ensure necessary conditions for carrying out Party activities.”
Nonetheless, most Michigan Democrats have supported the factory as a job creator, dismissing national security concerns. Democrat Governor Gretchen Whitmer in particular has enthusiastically embraced the project, saying she is “proud” to partner with the company and touting it as “the biggest ever economic development project in northern Michigan.”
Republicans and Michigan residents, meanwhile, have been less enthusiastic. Tudor Dixon, the Republican nominee who fell short in her bid to unseat Whitmer last year, tweeted, “Michigan is handing $715M taxpayer dollars to Gotion, a company with clearly documented ties to the Chinese Communist Party. Why are we allowing the enemy to own land and set up shop in the center of the country? Why won’t Gotion leaders denounce the CCP?”
Some Michiganders have expressed concerns over a lack of transparency and public input on the factory. According to one Michigan political news outlet, Lori Brock, a local farm owner who organized a protest against the plan, said, “I feel like we’re being harassed… “They are trying to shut me up. They’re trying to scare me and I’m not going to put up with it.”
During one of the few public hearings about the Gotion project, Marjorie Steele, a Michigan resident who lives near where the factory will be built, said, “I’m angry that you, our elected officials, have ignored my community’s pleas to table this vote until some small semblance of due diligence can be performed.”
Notably, the federal Committee on Foreign Investment in the United States (CFIUS) – which is led by the Secretary of the Treasury, composed of top Biden administration officials, and charged with determining the national security implications of foreign investments in U.S. companies or operations – held that the deal was “not in its jurisdiction.” The decision raised some eyebrows among observers, particularly after another case earlier this year where CFIUS ruled that a Chinese entity buying up farmland just 15 miles outside an Air Force base in North Dakota was also outside its jurisdiction.
The Gotion plant is just the most recent Beijing-linked company to set up shop in Michigan. In February, Contemporary Amperex Technology (CATL) announced that it would be building a $3.5 billion plant in the Mitten State as part of a joint project with Ford.
Initially, Virginia looked like the frontrunner for the CATL project. But in January, Republican Governor Glenn Youngkin removed his state from the running, citing concerns about ties between CATL executives and top CCP officials.
As the New York Times reported in 2021, CATL has received “lavish subsidies, a captive market of buyers, and soft regulatory treatment” from the Chinese government. Zeng Yugun, the company’s CEO, is a member of at least one industry group led by the Chinese Politburo. Some whistleblowers have even linked the company to forced labor operations as a part of China’s persecution of Muslim minorities in Xinjiang Province.
A few weeks after pulling out of the running for the battery plant, Youngkin and Virginia Republicans also passed a bill banning foreign adversaries like China and Iran from buying farmland in the Old Dominion.
Republicans in other states have adopted an approach similar to Youngkin’s, often with significant pushback from Democrats. In 2023 alone, at least eight Republican-led states have passed some variation of a ban on Chinese companies purchasing farmland, while other states are looking at legislative action to track all Chinese business activity more closely.
However, without a united effort against the CCP’s attempts to use its control over Chinese businesses to potentially undermine U.S. national security and economic interests, red state efforts may prove inadequate.
Neil Banerji is a proud Las Vegas resident and former student at the University of Oxford. In his spare time, he enjoys reading Winston Churchill and Edmund Burke.
