A Michigan government board approved on Wednesday $715 million in grants and a tax exemption for a battery manufacturer with deep ties to the Chinese Communist Party.
Gotion, Inc., will use the funds to build an electric vehicle battery manufacturing plant in Big Rapids, The Detroit News reported. Although the company’s U.S. subsidiary was incorporated in California in 2014, Gotion was founded in 2006 in Hefei, China. Gotion is headed up by Zhen Li, a member of the Chinese Communist Party who served three terms on a party committee.
State board OKs $715M in tax incentives for Gotion’s Big Rapids EV battery parts planthttps://t.co/OBSEY0Ibpy
via @bykaleahall & @detroitnews
— Chad Livengood (@ChadLivengood) October 5, 2022
The Michigan Strategic Fund (MSF) Board’s grant will reportedly save Gotion, Inc., $540 million over a 30-year period. The company claims that the factory will create 2,350. The Michigan state legislature approved $1 billion in new spending on Sept. 28, $846 million of which goes to the fund that Gotion will be paid out of.
“We are thrilled to congratulate the Gotion team on choosing Michigan as their American home for opportunity! Team Michigan continues to out-hustle and out-compete to ensure every global company considering their future expansion opportunities can see their future here in our state, just like Gotion does,” Quentin L. Messer, Jr., chairman of the MSF Board, said in a statement.
Li is the second-largest shareholder of Gotion, behind only Volkswagen, according to Electrive, and is the “de facto controller” of the company. He was a member of the 13th, 14th, and 15th National People’s Conference Hefei Committee, a local affiliate of the Chinese People’s Political Consultative Conference.
CCP and Chinese government-affiliated entities have invested at length in U.S. corporations and signed major deals in at least 40 states, according to Public Citizen. Notably, Chinese investors purchased Smithfield Foods, the largest pork processor in the world, in 2013.
A May report from the U.S.-China Economic AND Security Review Commission found that the country may have “undue leverage over U.S. supply chains” if purchases continue. Chinese investors control 352,140 acres of American farmland, roughly one percent of all foreign investment. (RELATED: House Republicans Request Gov’t Watchdog Investigate Foreign Investments In American Farmland)
Chinese firms also control large portions of the electric vehicle battery supply chains. The country produced 79% of all lithium ion batteries in 2021, and holds cobalt contracts in places like the Democratic Republic of the Congo. China also entered negotiations with the Taliban in 2021 over Afghanistan’s mineral wealth, and is expected to begin developing copper mines.