WASHINGTON (AP) \u2014 It was billed as the \u201cbiggest ever economic development project\u201d in north Michigan when Gov. Gretchen Whitmer in 2022 welcomed a Chinese lithium-ion battery company\u2019s plan to build a $2.36 billion factory and bring a couple thousand jobs to Big Rapids.<\/p>\n\n\n\n
But now the\u00a0project by Gotion High-Tech\u00a0is in the crosshairs of some U.S. lawmakers and local residents.<\/p>\n\n\n\n
Leading the charge is Republican Rep. John Moolenaar of Michigan, chairman of the House Select Committee on China, who accuses the Chinese company of having ties to forced labor and says he fears it could spy for Beijing and work to extend China\u2019s influence in the U.S. heartland. Gotion rejects the accusations.<\/p>\n\n\n\n
\u201cI want to see this area have more jobs and investments, but we must not welcome companies that are controlled by people who see us as the enemy and we should not allow them to build here,\u201d Moolenaar said at a recent roundtable discussion in Michigan.<\/p>\n\n\n\n
Lured by the large U.S. market,\u00a0Chinese businesses\u00a0are coming to the United States with money, jobs and technology, only to find rising suspicion at a time of an intensifying U.S.-China rivalry that has spread into the business world.<\/p>\n\n\n\n
U.S. wariness of China, coupled with Beijing\u2019s desire to protect its technological competitiveness, threatens to rupture ties between the world\u2019s two largest economies. That could hurt businesses, workers and consumers, which some warn could undermine the economic foundation that has helped stabilize relations.<\/p>\n\n\n\n
\u201cThis is a lose-lose scenario for the two countries,\u201d Zhiqun Zhu, professor of political science and international relations at Bucknell University, said in an email. \u201cThe main reason is U.S.-China rivalry, and the U.S. government prioritizes \u2018national security\u2019 over economic interests in dealing with China.\u201d<\/p>\n\n\n\n
Lizhi Liu, an assistant professor of business at Georgetown University, said the trend, along with the decline of U.S. investments in China, could hurt China-U.S. relations.<\/p>\n\n\n\n
\u201cStrong investment ties between the two nations are crucial not only for economic reasons but also for security, as intertwined economic interests reduce the likelihood of major conflicts or even war,\u201d she said.<\/p>\n\n\n\n
But U.S. lawmakers believe the stakes are high. Sen. Marco Rubio said at a July hearing that China is not only a military and diplomatic adversary for the U.S. but also a \u201ctechnological, industrial and commercial\u201d opponent.<\/p>\n\n\n\n
\u201cThe technological and industrial high ground has always been a precursor of global power,\u201d said Rubio, a Republican from Florida. He argued that U.S. foreign policy should take into account the country\u2019s commercial, trade and technological interests.<\/p>\n\n\n\n
The bipartisan House Select Committee on China has warned that widespread adoption in the US. of technologies developed by China could threaten long-term U.S. technological competitiveness.<\/p>\n\n\n\n
U.S. public sentiment against Chinese investments began to build up during President Barack Obama\u2019s administration, in a pushback against globalization, and were amplified after President Donald Trump came into office, said Yilang Feng, an assistant professor of business at University of Illinois at Urbana-Champaign, who studies economic nationalism and resistance to foreign direct investments in the U.S.<\/p>\n\n\n\n
\u201cThe scale has increased, so has the intensity,\u201d Feng said.<\/p>\n\n\n\n
As President Joe Biden\u2019s administration seeks to revive American manufacturing and boost U.S. technological capabilities, many politicians believe Chinese companies should be kept out.<\/p>\n\n\n\n
\u201cCan you imagine working for an American company working tirelessly to develop battery technology and then you find out that your tax dollars are being used to subsidize a competitor from China?\u201d Moolenaar said as he campaigned against the Gotion project in his congressional district in a state that is critical in the presidential election.<\/p>\n\n\n\n
Whitmer\u2019s office has declined to comment on the project. The Michigan Economic Development Corporation told The Associated Press it has received \u201cbipartisan support at all levels\u201d to move forward with the project, which will create up to 2,350 jobs.<\/p>\n\n\n\n
Danielle Emerson, spokesperson for MEDC, said the project is \u201ccritical to onshore the battery supply chain and create thousands of good-paying local jobs, which reduces our reliance on overseas disruptions and further protects our national security.\u201d<\/p>\n\n\n\n
Local residents of Green Charter Township, however, revolted against the project over its Chinese connections last year when they\u00a0removed five officials\u00a0who supported it in a recall election.<\/p>\n\n\n\n
Also in Michigan, a partnership between Ford and CATL, another Chinese battery manufacturer, has been scaled back, following pushback over CATL\u2019s potential connections to China\u2019s ruling party.<\/p>\n\n\n\n
In Worcester, Massachusetts, the Chinese biotech company WuXi Biologics paused construction of a large facility a few weeks after lawmakers introduced a bill that would, over data security concerns, ban U.S. entities receiving federal funds from doing business with a number of China-linked companies, WuXi Biologics included.<\/p>\n\n\n\n
John Ling, who has helped South Carolina and Georgia attract Chinese businesses for nearly two decades, said geopolitics have been getting in the way in recent years. Chinese companies are less likely to consider South Carolina after the state senate last year\u00a0approved a bill\u00a0banning Chinese citizens from buying property, even though the bill has yet to clear the statehouse, Ling said.<\/p>\n\n\n\n
Data by the U.S. Bureau of Economic Analysis show the total investments by China in the U.S. fell to just under $44 billion in 2023, from a high point of $63 billion in 2017, although first-year expenditures rose to $621 million in 2023, up from $531 million in 2022 but drastically down from the high of $27 billion in 2016. The figures include acquisitions, new business establishments and expansions.<\/p>\n\n\n\n
Thilo Hanemann, a partner at the research provider Rhodium Group, said there\u2019s been an upswing in new Chinese investments in the U.S. following a major decline, prompted by the end of disruptions during the COVID-19 pandemic and the need for Chinese companies to go overseas when margins at home are dwindling.<\/p>\n\n\n\n
U.S. policymakers are worried that Chinese companies, beholden to the ruling Chinese Communist Party, could pose national security risks, he said, while Beijing is concerned that overseas investments could lead to Chinese technology leakage.<\/p>\n\n\n\n
\u201cChinese companies are in between a rock and a hard place, dealing with both domestic governments in terms of not letting them go abroad and then the U.S. or host governments that have concerns,\u201d Hanemann said.<\/p>\n\n\n\n
Yet, Chinese investors may still find the U.S. market appealing \u201cdue to its high consumption levels and judicial independence,\u201d said Liu of Georgetown University.<\/p>\n\n\n\n
In 2022, Michigan beat out several other states in luring Gotion, according to the governor\u2019s office. Keen to revive its manufacturing base, the state offered\u00a0a package of incentives, including $175 million in grants and the approval of a new zone that could save the company $540 million. Local townships approved tax abatements for Gotion to build a factory to make components for electrical vehicle batteries.<\/p>\n\n\n\n
In Green Charter Township, the new board dropped support for the project and rescinded an agreement that would extend water to the factory site, only to\u00a0be rebuked by a U.S. district judge.<\/p>\n\n\n\n
The future of the plant remains uncertain, as Moolenaar is rallying support for his bill that would prevent Gotion from receiving federal subsidies. He has accused the company of using forced labor, after congressional staff discovered links between the company and Xinjiang Production Construction Corps., a paramilitary group sanctioned by the U.S. Commerce Department for its involvement in China\u2019s forced labor practice.<\/p>\n\n\n\n
Chuck Thelen, vice president of manufacturing of Gotion North America, in recent town hall meetings called the forced labor accusations \u201ccategorically false and clearly intended to deceive.\u201d<\/p>\n\n\n\n
By allowing the Chinese company to build a plant in Michigan, it would help \u201conshore a technology that has been vastly leapfrogged\u201d outside of the U.S., he said.<\/p>\n\n\n\n
It doesn\u2019t amount to \u201ca Chinese invasion,\u201d Thelen said. \u201cThis is a global approach, an energy solution.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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