UC Berkeley Failed to Disclose $220 Million Deal That Benefitted Sanctioned Chinese Companies: Report

By: Philip Lenczycki, Daily Caller News Foundation

A California university did not report hundreds of millions of dollars in funding from the Chinese government that was used to launch a joint research campus in China, according to The Daily Beast.

Between 2014 and 2018, the University of California at Berkeley received a $240 million investment from the Chinese government and Tsinghua University — which has been called “China’s MIT” — to launch a joint research facility in Shenzhen, China, known as the Tsinghua-Berkeley Shenzhen Institute (TBSI), a Daily Beast investigation reportedMonday. However, Berkeley never formally disclosed any of the foreign investment to the U.S. government prior to being notified of the investigation, according to the report.

In 2018, Berkeley struck a $220 million deal with the Shenzhen government to construct an approximately 1.7 million-square-foot research campus in China, according to the report. Despite this, Berkeley has never officially reported the $220 million Shenzhen campus deal to the U.S. government, claiming that facilities are still under construction, according to The Daily Beast.

The TBSI venture began in 2014 when the Shenzhen government promised to provide Berkeley with $52 million to begin the project, according to the report. More than half of the $52 million was earmarked to buy equipment in China “effectively adding facilities and equipment to Berkeley’s research capacity,” according to a 2015 Berkeley document obtained by The Daily Beast.

Shenzhen’s mayor at the time attended the ceremony launching the TBSI project, which Tsinghua’s president characterized as a “university-government-industry partnership,” according to the report.

In 2016, Tsinghua then injected a $19 million investment into the TBSI venture, according to The Daily Beast.

Behind the scenes, the $19 million Tsinghua grant was sponsored by Shenzhen Waranty Asset Management, a state-owned enterprise, according to the report. In exchange for its financial support, the state-owned company would reportedly receive “priority commercialization rights” to negotiate a license for intellectual property resulting from its $19 million investment.

In addition to Shenzhen Waranty Asset Management, dozens of Chinese companies have supported and advised the TBSI venture, including tech firms that the U.S. government has sanctioned, such as Huawei, ZTE and DJI, according to The Daily Beast.

Berkeley never reported the $19 million Tsinghua contract to the U.S. government, claiming that the Department of Education lacked clear reporting requirements at the time the deal was struck, according to The Daily Beast.

Yet, universities have a “reporting obligation” to the U.S. government “within six months” of when they sign a foreign contract, experts told The Daily Beast.

In January 2022, Berkeley also neglected to disclose the renewal of its agreement with TBSI to the U.S. government, which a Berkeley spokesperson claimed was due to “an issue in the query pulling the data,” according to The Daily Beast.

Berkeley only reported the agreement renewal to the U.S. government after The Daily Beast reached out for comment in February 2023, according to the report.

Berkeley also allowed Chinese officials tied to TBSI — including party officials and the vice mayor of Shenzhen — to privately tour their U.S. semiconductor facilities at the Marvell nanofabrication laboratory, with one Chinese press release concerning a lab tour stating that the visitors wished to “build a better lab abroad,” according to The Daily Beast.

Berkeley did not respond immediately to the Daily Caller News Foundation’s request for comment.

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