Chinese businesses hoping to expand in the US and bring jobs face uncertainty and uncertainty

WASHINGTON – Billed as “the largest economic development project” in northern Michigan when Gov. Gretchen Whitmer in 2022 approved the Chinese lithium-ion battery company’s plan to build a $2.36 billion factory and bring several thousand jobs to Big Rapids.

But now the Gotion High-Tech project is in the midst of US lawmakers and local citizens.

Leading the charge is 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 on Beijing and work to expand its influence China to the US. the heart Gotion denies the allegations.

“I want to see this area have more jobs and more investment, but we must not accept companies controlled by people who see us as enemies and we must not to allow them to build here,” Moolenaar said in a recent interview in Michigan. .

Lured by the huge American market, Chinese businesses are coming to the United States with money, jobs, and technology, only to find growing skepticism at a time of intense US-China competition that has permeated the business world. .

America’s wariness of China, coupled with Beijing’s desire to protect its technological competitiveness, threatens to strain relations between the world’s two largest countries. That could hurt businesses, workers and consumers, which some warn could undermine the economic foundation that has helped stabilize relations.

“This is a lose-lose situation for both countries,” Zhiqun Zhu, a professor of political science and international relations at Bucknell University, said in an email. “The main reason is the US-China rivalry, and the US government prioritizes “national security” over economic interests when dealing with China.”

Lizhi Liu, an associate professor of business at Georgetown University, said this trend, along with the decline in American investment in China, could damage China-US relations.

He said: “Strong investment relations between the two nations are important not only for economic reasons but also for security, as shared economic interests reduce the possibility of major conflicts or even war.”

But US lawmakers believe the stakes are high. Sen. Marco Rubio said at the July meeting that China is not only a military and diplomatic opponent for the US but also a “technological, industrial and commercial” opponent.

“Technological and industrial superiority has always been a precursor to global power,” said Rubio, a Republican from Florida. He argued that US foreign policy should take into account the country’s interests in trade, commerce and technology.

The bipartisan House Select Committee on China has warned that adoption of American children is widespread. of technology developed by China could threaten the long-term competitiveness of US technology.

US public sentiment against Chinese investment began to grow during the administration of President Barack Obama, in an anti-globalization campaign, and intensified after President Donald Trump took office, said Yilang Feng, associate professor of business at the University of Illinois at Urbana-Champaign. , who studies economic nationalism and opposition to US foreign investment

“The rate has increased, so has the power,” Feng said.

As the administration of President Joe Biden seeks to revive American manufacturing and strengthen US technological capabilities, many politicians believe that Chinese companies must be shut down.

“Can you imagine working for an American company working hard to develop battery technology, only to find out that your tax dollars are being used to subsidize competition from China?” Moolenaar said this while campaigning against Gotion’s plan in his congressional district in the presidential election.

Whitmer’s office declined to comment on the project. The Michigan Economic Development Corporation told The Associated Press that it has received “all-party support” to move forward with the project, which will create about 2,350 jobs.

Danielle Emerson, spokeswoman for MEDC, said the project is “critical to securing the battery supply and creating thousands of good-paying local jobs, reducing our reliance on foreign barriers and protecting the security of our country.”

Local residents of Green Charter Township, however, turned against the project because of its Chinese connections last year when they removed five officials who had supported it in a recall election.

Also in Michigan, a partnership between Ford and CATL, another Chinese battery maker, has weakened, following pushback over CATL’s potential ties to China’s ruling party.

In Worcester, Massachusetts, Chinese biotech company WuXi Biologics halted construction of a major facility weeks after lawmakers introduced a bill that would have barred U.S. companies from receiving federal funding. doing business with several companies related to China. , WuXi Biologics included.

John Ling, who has helped South Carolina and Georgia attract Chinese businesses for nearly two decades, said geopolitics has gotten in the way in recent years. Chinese companies are unlikely to consider South Carolina after the state senate last year approved a bill barring Chinese nationals from buying the property, although the bill has yet to clear the statehouse, Ling said. .

Data from the US Bureau of Economic Analysis show China’s total investment in the US will drop to $44 billion in 2023, from a high of $63 billion in 2017, although first-year spending has risen to $621 million by 2023, from. $531 million by 2022 but is down significantly from a high of $27 billion in 2016. The figures include acquisitions, new business creations and expansions.

Thilo Hanemann, a partner at research provider Rhodium Group, says there has been a turnaround in new Chinese investment in the US after a sharp decline, due to the end of barriers during the COVID-19 pandemic and the need to Chinese companies go overseas. as home margins decrease.

US policymakers worry that Chinese companies, watched by China’s ruling Communist Party, could pose national security risks, while Beijing worries that overseas investment could lead to the collapse of Chinese science.

“Chinese companies are between a rock and a hard place, dealing with both local governments not allowing them to go overseas and the US or host governments having concerns,” Hanemann said.

However, Chinese investors may still find the U.S. market appealing “due to high leverage and judicial independence,” said Georgetown University’s Liu.

In 2022, Michigan beat out several other states in attracting Gotion, according to the governor’s office. Eager to renew its manufacturing plant, the government has offered a package of incentives, including subsidies of 175 million dollars and the approval of a new site that can save the company $ 540 million. Local cities have approved tax breaks for Gotion to build a factory to make parts for electric vehicle batteries.

In Green Charter Township, the new board rejected support for the project and canceled an agreement that would have extended water to the plant, and was reprimanded by a US district judge.

The future of the plant remains uncertain, as Moolenaar is gathering support for his bill that would bar Gotion from receiving government subsidies. He accused the company of using forced labor, after congressional staff found links between the company and the Xinjiang Production Construction Corps., a military unit authorized by the US Department of Commerce for involvement in in China’s forced operation.

Chuck Thelen, Gotion’s vice president of North American manufacturing, at a recent town hall meeting called the forced labor claims “a big lie and clearly intended to deceive.”

By allowing a Chinese company to build a plant in Michigan, it will help “use a technology that’s already been heavily hacked” outside the US, he said.

It’s not like a “Chinese attack,” Thelen said. “This is a global, energy solution.”