A Chinese maker of electric vehicle battery chemicals that plans to build two factories in the United States has longstanding ties to China’s military-industrial complex, a Daily Caller News Foundation investigation has found.
Capchem Technology USA, Fully invested A subsidiary of China-based Shenzhen Capchem Technology (Capchem) plans to build factories in both Ohio and Louisiana to produce components for electric vehicle batteries.Chinese government documents reveal The Chinese chemical giant was selected more than a decade ago to conduct aerospace research for China’s military-industrial complex as part of a program overseen by a blacklisted Chinese government agency. (Related: Exclusive: Republican attorney general asks Biden administration to restrict foreign land ownership near major military bases)
By 2023, the company had received payments from the Ministry of Industry and Information Technology, the government agency leading the Chinese government’s so-called “military-civil fusion” efforts, according to a company report.
“This network is [Chinese Communist Party] “Military companies across the United States are a perfect example of why blind economic engagement with China poses a national security threat,” said Brian Black, senior policy advisor for China and Indo-Pacific at the Heritage Foundation’s Center for Asian Studies. he said. DCNF.
DCNF’s research is based in part on information provided by the Heritage Foundation and Heritage Action.
Capchem specializes in producing chemicals for electric vehicle batteries and has for years promoted military applications for its products in annual reports and online.In fact, until recently, the company’s website boldly said Its products were used in “high-end military equipment.”
However, Capchem denies supplying the Chinese military, and references to “high-end military equipment” were removed from its website within 24 hours of DCNF’s request for comment.
Capchem “does not have any products used by the Chinese military or other military organizations,” a spokesperson told DCNF.
A spokesperson said, “When we created the Anglo-American website, we mistakenly included a reference to “military”.” “When you reported this issue to the company, it was removed, as was the Chinese version in 2020.”
However, the military reference was also posted on Capkem’s Chinese-language website when DCNF reached out for comment. References to Capchem’s Chinese site appear to have been removed at about the same time as the English site.
Capchem business Documents to be submitted and corporate notice In conjunction with the China Financial Services Survey from 2023 report It is also worth noting that as of January 2024, the company’s products were used in military applications.
[Image created by the DCNF with screenshots from Capchem’s website]
“Military-civilian fusion”
Capchem’s cooperation with China’s military-industrial complex dates back to at least 2012. In that year, the Ministry of Industry and Information Technology of Guangdong Province announced Capchem is one of the 70 companies selected for the “Guangdong Province National Defense Science, Technology, Industry, Military-Civil Fusion Excellent Work Department”.
This unit of work focused on “critical components for the aerospace sector,” including “spaceflight-grade high-reliability core electronic components, high-end general-purpose chips, basic software, etc.” (2012 Industrial Information Technology Ministry’s announcement) Read.
The project is being supervised by China’s General Administration of Defense Science, Technology and Industry, which is “under the direct supervision of the Ministry of Industry and Information Technology” and is “in charge of nuclear weapons, aerospace technology, aviation, weapons, ships, weapons, etc.” There is. electronic industry” according to To the State Council of China.
China’s “military-civil fusion strategy” aims to modernize the PLA by ensuring that the PLA acquires advanced technology and expertise developed by Chinese companies, universities, and research programs likely by private organizations. It supports the goal.” according to To the US Department of Defense.
Mike Gallagher (Wisconsin), Chairman of the House Select Committee on the Communist Party of China, and influential Congressman Raja Krishnamoorthi recently sent The letter to the Treasury and Defense Departments pointed out that the U.S. government’s blacklist of Chinese military companies also applies to companies working with China’s Ministry of Industry and Information Technology.
“Among other qualifying considerations, a company is a “military civilian fusion contributor” if it has “partnered with China’s Ministry of Industry and Information Technology, including on research partnerships and projects,” the lawmakers said. was written in January 2024. His Industry and Information Technology Department was established in 2008 and is key to China’s military-civil fusion strategy. ”
According to Capchem’s annual report, the company has received millions of dollars in payments from the Ministry of Industry and Information Technology since 2017. The ministry paid the company about $1.5 million in 2017 for an “industrial infrastructure project.” according to In Capchem’s annual report for that year.
According to Capchem’s latest annual report, the Ministry of Industry and Information Technology had allocated just under $1 million in grants to the company at the end of the 2023 interim reporting period.
Despite this, Capchem initially denied in an email to DCNF that it had received “money/subsidy/donations from the Chinese government,” although a spokesperson said the company received “economic development tax incentives.” He said he had received.
But when DCNF pointed to the company’s own annual report, the spokesperson changed his tune.
“Aside from the standard incentives and prizes offered to all eligible businesses, the last time the company received Chinese government subsidies was between 2016 and 2018,” the spokesperson said. Ta. “References to subsidies in corporate reports apply to subsidies received during the period. The company has not received any such subsidies since 2018.”
Capchem’s corporate report lists $26 million in subsidies from various Chinese government agencies. The company’s 2023 mid-term report lists new government subsidies worth about $10 million under the heading “Programs with government subsidies.”
Heritage’s Black said Capchem is “subsidized by the Chinese government” and “manufactures for the Chinese military.”
“There’s no question who these companies actually work for,” Black said. “There is no such thing as a Chinese private company.”
“Aerospace and military industry”
Capchem has long promoted the dual-use nature of its products.For example, his 2009 annual report of Capchem was popular How the company’s products are used in the “aerospace and military industries.”
Liu Zhongbo, Deputy Director of Capchem Research Institute, said: Discussed Military applications of the company’s sodium-ion batteries were announced at a battery forum held in Jiangsu province in July 2023.
“Lithium-ion and sodium-ion batteries represent a new type of battery that serves as a critical foundation to support a wide range of applications of new energy sources in fields such as power, transportation, communications, and military,” Liu said. mentioned during the event. , according to Visit Capchem’s website.
“In the future, Capchem will strictly follow the national strategy to support the mass production of sodium-ion batteries,” Liu said.
Most recently, the January 2024 survey report Chinese financial services company Hua’an Securities has announced that Capchem’s fluorinated polyimide products are used in the nuclear industry and military, and that its perfluoropolyether oil products are used in aerospace landing gear, rudders, and aircraft control mechanisms. recognized as being used.
“Security risk”
Capchem’s plans to expand its footprint in the United States come as federal and state authorities move to ban Chinese companies from owning American land. Missouri Governor Mike Parson recently issued an executive order banning Chinese-linked entities from purchasing agricultural land within 10 miles of “significant military installations” in the state starting in January 2024.
Capchem USA plans to build an approximately $120 million plant in Lawrence County, Ohio. announced County commissioners recently approved a 50% tax abatement for Capchem USA’s facilities, the Herald-Dispatch reported. The facility will be a “production facility for manufacturing chemicals for batteries.” according to To Kapkem.
Capchem USA is also considering building a $350 million factory in Louisiana. according to to the Louisiana Economic Development Authority, a government agency.
Ohio Republican Rep. Brad Wenstrup’s Congressional District It contains Lawrence County. Wenstrup’s press secretary, Barbara Boland, told DCNF that the congresswoman “is concerned about the potential national security risks posed by Chinese-owned companies operating in the United States to supply chains, intellectual property, and national security.” “I warned them about the risks.”
“Senator Wenstrup is advising local governments and those pursuing economic development opportunities to thoroughly vet companies seeking to leave a footprint in their communities,” Boland said.
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