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Parent of Firm Planning Mich. Battery Plants Has Joint Venture with ‘Communist Chinese Military Company Subsidiary’

[Image from Sohu.com]
[Image from Sohu.com]

By: Philip Lenczycki, Daily Caller News Foundation

The Chinese parent company of Gotion Inc., which intends to build two electric battery plants in Michigan, established a joint venture company with a “Communist Chinese Military Company (CCMC) Subsidiary” in 2016, according to the framework agreement.

In 2016, Gotion High-Tech became the majority shareholder of Energine Guoxuan (Tangshan) New Energy Technology Co., Ltd., after entering into a Strategic Cooperative Framework Agreement with China Energine International (Holdings) Limited, according to an announcement on the Hong Kong Stock Exchange’s issuer website and a 2016 interim report published by China Energine.

In January 2021, the State Department identified China Energine as a “CCMC Subsidiary,” meaning that it “may be eligible for listing” under an executive order that would prohibit U.S. investors from purchasing or selling the firm’s securities. (RELATED: EXCLUSIVE: Chinese Parent Behind Company Building Michigan Battery Plants Employs 923 CCP Members)

In August, Fox News reported that Gotion Inc. had received a greenlight from Michigan Democratic Gov. Gretchen Whitmer and the Biden administration to “invest $2.4 billion to construct two 550,000-square-foot production plants” for electric vehicle (EV) batteries in Big Rapids, Michigan — which is located within Republican Rep. John Moolenaar’s 2nd Congressional district.

“It is no surprise that Gotion High-Tech partnered with China Energine to develop products for China’s military,” Moolenaar told the DCNF. “The finding that Gotion High-Tech has done business directly with China’s military is further proof that Gotion is not a good partner to build in Michigan.”

More recently, Gotion Inc. decided to build a “state-of-the-art $2 billion” EV battery plant in Manteno, Illinois, “bolstered” by state incentives, an Illinois government press release announced.

“Today, we take another leap forward, announcing the largest electric vehicle battery production investment in Illinois to date. It’s my pleasure to welcome a world-leading battery manufacturer — Gotion — to Illinois,” Illinois Gov. J.B. Pritzker said, according to the press release.

The DCNF recently reported that Gotion High-Tech employs 923 CCP members, including its CEO Li Zhen, who is also the party secretary for the firm’s CCP committee. Under Li Zhen’s leadership, Gotion High-Tech has run multiple company field trips, during which employees dressed as Red Army soldiers and pledged allegiance to the CCP, the DCNF also found.

The DCNF also reported that the CCP party secretary of Anhui province quietly established an “Overseas Talent Work Station” within Gotion Inc.’s Silicon Valley headquarters in June 2017, aiming to recruit experts to work in China.

Chuck Thelen, the vice president of North American manufacturing at Gotion Inc. — which is “wholly owned and controlled” by Gotion High-Tech, according to a Foreign Agents Registration Act filing — said that “the Chinese Communist Party has no presence in the North American company,” Politico reported on August 13.

“The rumors that you’ve heard about us bringing communism to North America are just flat-out fear-mongering and really have nothing based in reality,” Thelen said, according to Politico’s report.

‘Banner Of China’s Military Enterprises’

On Feb. 3, 2016, Gotion High-Tech, China Energine and the People’s Government of Lubei County, Tangshan, China, entered into a Strategic Cooperative Framework Agreement, setting the wheels in motion to establish a new joint venture, Energine Guoxuan, in Tangshan, according to the agreement on the Hong Kong Stock Exchange’s issuer website.

“The Executive Directors of China Energine International (Holdings) Ltd. (‘the Company’) are pleased to announce that 3 February 2016, the Company and Hefei Guoxuan High-Tech Power Energy Co., Ltd. (Guoxuan Hitech) and the People’s Government of Lubei County, Tangshan City entered into a Strategic Cooperative Framework Agreement (‘Framework Agreement’) for the cooperation between the Company and Guoxuan Hitech,” China Energine’s 2016 Strategic Cooperative Framework Agreement states, using the English name that Gotion High-Tech went by prior to a May 2020 name change.

“Pursuant to the Framework Agreement, the Company and Guoxuan Hitech will establish a joint-venture company in Tangshan, mainly engaging in research and development and manufacture of power battery, research and development and application of graphene material, as well as the application and promotion of energy storage products in military and civil areas,” it said. “The name of the joint-venture company is Energine Guoxuan (Tangshan) New Energy Technology Co. Ltd., whose shareholding Guoxuan Hitech will hold 51% and China Energine 49%.”

“The joint venture will strengthen on the research and development and application of military energy storage products, stressing on promoting power battery application on military vehicles and military ships and boats,” it stated.

Gotion High-Tech’s CEO Li Zhen attended the opening ceremony for the joint venture, Energine Guoxuan, in June 2017, Sohu.com reported. During his speech at the opening ceremony, Li Zhen identified Gotion High-Tech’s new partner, China Energine, as a Chinese military company, according to Sohu.com.

“China Energine is a banner of China’s military enterprises,” Li Zhen said during the speech, Sohu.com reported.

In 2021, the State Department identified China Aerospace Science and Technology Corporation (CASC) as a CCMC, and, in turn, identified China Energine as its CCMC Subsidiary.

While the China National Space Administration (CNSA) “administers China’s lunar exploration program,” China Energine’s parent company, CASC, “develops and manufactures space launch vehicles, strategic ballistic missiles, satellites and other space flight vehicles,” according to a 2020 research report prepared for the U.S.-China Economic and Security Review Commission by Project 2049 Institute, a “nonprofit research organization,” and Pointe Bello, a “strategic intelligence firm.”

China Energine’s chairman Han Shuwang also attended Energine Guoxuan’s 2017 opening ceremony in Tangshan, according to Sohu.com.

As with Li Zhen, Han Shuwang also belongs to the CCP and served as the party secretary for China Energine’s CCP committee, according to the firm’s website, but resigned from the company in 2018, that year’s annual report states.

Military-Civil Fusion

Energine Guoxuan’s products are highly sought after by the Chinese military, Brandon Weichert, a consultant to the U.S. Air Force and the author of “Winning Space: How America Remains A Superpower,” told the DCNF.

“China has been keenly interested in developing alternative energy for military applications,” Weichert said.

“China is heavily invested in space-based solar power, which basically would place collectors in geosynchronous orbit and then transmit the solar power continuously via microwave radiation to collectors on the ground,” Weichert said. “The battery technology would be useful because it would store that solar power on vehicles, etcetera, and make things more efficient.”

Likewise, graphene — which Energine Guoxuan is also producing, according to the 2016 Strategic Cooperative Framework Agreement — also has a military application in the aerospace field, Weichert said.

“Graphene is an extremely light metal that is ultra-durable — truly revolutionary stuff,” Weichert said. “Graphene can be critical for advanced aerospace designs, etcetera. More sophisticated warplanes and drones can be layered by a skin of graphene.”

In 2020, the State Department issued a report warning that aerospace is one of several key technologies targeted by the CCP’s “Military-Civil Fusion (MCF)” strategy.

“Under MCF, the CCP is systematically reorganizing the Chinese science and technology enterprise to ensure that new innovations simultaneously advance economic and military development,” according to the State Department.

“We know that because of the CCP’s policy of military-civil fusion there really is no difference between doing business with the CCP and the People’s Liberation Army (PLA),” Rep. Moolenaar told the DCNF.

General Secretary Xi Jinping personally oversees the MCF strategy, which “allows a growing number of civilian enterprises and entities to undertake classified military R&D and weapons production,” the State Department said.

“MCF is the CCP’s strategy to develop the People’s Liberation Army [PLA] into a ‘world class military’ by 2049,” the State Department said.

Gotion Inc. and Gotion High-Tech did not respond to multiple requests for comment.

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