In Michigan, Gov. Gretchen Whitmer (D) is taking a victory lap. The Democrat-controlled legislature's appropriations committees are at the threshold of authorizing two battery projects to receive billions in state economic assistance and incentives. One is the Ningde, China-based Contemporary Amperex Technology in Marshall. The other is with the Hefei, China-based Guoxuan High-Tech (Gotion) in Mecosta County. Whitmer hopes the projects will generate thousands of jobs and billions in economic activity in Michigan. Looks like a huge win for Michigan.
But as with all such events, there is a story behind the headlines. The biggest winner may not be Michigan, but the Chinese Communist Party, the entity that controls China. FBI Director Christopher Wray has forcefully voiced the FBI’s concern about the growing threat of the CCP, pointing out its significant economic theft of intellectual property — $225 billion to $600 billion annually. It is in that context that Michigan is funding a new gateway for economic espionage. And this is only one facet of the threat that the CCP poses to the U.S. and our allies.
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Additional threats include China's increasingly aggressive posture toward Taiwan. Recent reports acknowledge that Communist China's nuclear arsenal is now larger than our own. Throw in a Chinese spy balloon shot down over North America, and the picture is crystal clear to the average American (and Michigan) taxpayer. The CCP is a significant and growing threat, and it is time for state and federal legislators to acknowledge this.
In Michigan, the legislature should immediately freeze or repeal all incentives for the CCP to participate in any economic development activities in critical technologies, including with these two proposed battery plants. The CCP has consistently used these opportunities to benefit only itself. China's National Intelligence Law states clearly the requirement that the long arm of the CCP's intelligence agencies be given full access to businesses based in China, including in all their operations overseas. In short, Chinese companies are directly controlled by the CCP.
Second, our federal legislators must revise the Inflation Reduction Act, which is opening up new malign opportunities for the People's Republic of China. The IRA was intended to strengthen the U.S. industrial base through tax incentives, encouraging U.S. investment in critical technologies. But this is creating an opening for communist China, as one of the projects demonstrates. Ford Motor Company is partnering with Contemporary Amperex Technology for the project in Marshall, despite the latter's ties to the CCP. The two companies have creatively designed a business arrangement that allows the company to actively participate in the battery project and still qualify for the federal tax credits included in the IRA.
Both of the Michigan projects have been rushed, and all parties involved are covered by binding five-year non-disclosure agreements. It is particularly striking that Ford, an international business, and its Chinese partner have not voluntarily submitted themselves to a review by the Treasury Department's Committee on Foreign Investment in the U.S., the interagency committee authorized to review certain transactions involving foreign investment to determine their effect on national security.
Recently, Virginia Gov. Glenn Youngkin (R), a seasoned business executive well aware of the threat the CCP presents to our economic and national security, prudently rejected the Contemporary Amperex plant for his own state, calling it a "Trojan horse relationship with the Chinese Communist Party" and "a front for the Chinese Communist Party."
Congress needs to close the loophole that Ford and its Chinese partner are exploiting for this project. Both projects in Michigan should also be subjected to a national security review process, which is intended to protect key technologies from falling into hostile foreign hands like those of the Chinese communists.
We are working to ensure that requests are made for the Committee on Foreign Investment in the U.S. to review both of these projects. We encourage government leaders at all levels to do likewise. Private citizens can also request such reviews.
This is textbook CCP penetration of the U.S. economy on a sub-national level. They are cunning in their calculation, patient and persistent, and they utilize authoritarian efficiency as they influence our policymakers through intervening individuals and entities.
Taxpayer dollars must not be invested in U.S.-based projects that will fall under Chinese government control. We must be clear-eyed about the threat and fight it, rather than blindly invest taxpayer dollars to undermine our own national security.
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Peter Hoekstra, who served as ambassador to the Netherlands from 2018-21, also served on the U.S. House of Representatives House Intelligence Committee and represented Michigan's 2nd Congressional District for nine terms. Joseph Cella served as U.S. ambassador to Fiji, Kiribati, Nauru, Tuvalu, and Tonga from 2019-21.