New Pentagon List Should Spur States to Prioritize Made-in-America Projects
On Tuesday, the United States Department of Defense (DoD) posted notice to the Federal Register and added several new companies to a list of entities it deemed as falling within the definition of “Chinese military companies.” As the Pentagon explained in its annual report to Congress, the Chinese Communist Party’s goal is to “to strengthen all the [People’s Republic of China]’s instruments of national power by melding aspects of its economic, military, and social governance” and “establish an infrastructure that connects the military and civilian sectors” in order to advance its interests.
According to the DoD, these companies are working to further the interests of the CCP, and one company on the list is already benefiting from public subsidies to provide technology for a new battery plant in the U.S. As governments across the country work to implement “Made in America” policies, it is imperative that they source materials from companies that are domestically based and focused on U.S. interests.
Pentagon Warns About the World’s Largest Battery Maker
Contemporary Amperex Technology Co., Ltd. (CATL) – the world’s largest battery maker – is one of the new companies just added to the Pentagon’s list of Chinese military companies. In recent years, CATL entered into an agreement with the Ford Motor Company to open battery plants in the United States that would serve the automaker’s demand for electric vehicle batteries. In early 2023, Virginia Governor Glenn Youngkin rejected an overture by Ford and CATL to open a plant in Virginia, citing concerns that “this proposal would serve as a front for the Chinese Communist party.” Following that decision, Ford announced that it would collaborate with CATL on a battery plant in Marshall, Michigan. Despite concern over CATL’s ties to the CCP at the time, the project still won hundreds of millions of dollars in tax credits from Michigan economic development officials.
The Pentagon’s designation of CATL as a Chinese military company validates the long-held concerns about how the company would potentially leverage its partnership with Ford to benefit the CCP. Experts have warned that CATL’s control over customer data could enable spying and its integration into the U.S. electrical grid could create “potential vulnerabilities that could be exploited to disrupt essential services.”
Michigan Lawmakers Subsidizing Another Controversial Battery Plant
In addition to Michigan subsidizing Ford and CATL’s collaboration in Marshall, Gotion Inc. is also receiving a state incentive package worth $715 million to build a battery parts plant in Mecosta County. Gotion Inc. is a subsidiary of Gotion High Tech, which Chairman John Moolenaar, of the House Select Committee on the CCP, and Secretary of State nominee Senator Marco Rubio have described as having “deep ties to the Chinese Communist Party” in addition to connections to Chinese paramilitary groups. This week, the project also lost the support of the newly elected Mecosta County Board of Commissioners.
State Lawmakers Should Promote American Industry Instead of Subsidizing the CCP
One effective tool in the CCP’s toolkit is the use of ostensibly civilian companies to achieve its larger objectives through greater access, reach, and subtlety. The Pentagon’s list of Chinese military companies is a welcome acknowledgement that within the outlook of the CCP, the lines between civilian and military entities is greatly blurred as it attempts to gain strategic advantage over its adversaries.
As the Protecting America Initiative has outlined, policymakers can mitigate some of that risk by:
Banning direct and indirect incentives from going to Chinese companies
Targeting regulatory relief and economic assistance to American businesses
Prioritizing “made-in-the-USA” infrastructure in state-funded projects
Especially when dealing with fragile supply chains and sensitive infrastructure, state lawmakers should reject the urge to give adversarial actors unfair advantage over American industry.