Republicans Ask for CFIUS Review Involving Chinese Lithium Battery Supplier
The Committee on Foreign Investment in the U.S. should review U.S. investments made by Chinese lithium battery supplier Guoxuan High-Tech through its U.S. subsidiary, Gotion Inc., Republicans said in a Sept. 20 letter to Treasury Secretary Janet Yellen. The lawmakers said the company, also known as Guoxuan High-Tech, has invested in lithium battery manufacturing plants in Michigan and Illinois, adding that its owners’ “membership and affiliation” with the Chinese government “requires a rigorous review” by CFIUS.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Although Guoxuan High-Tech’s largest shareholder is Germany’s Volkswagen AG, which owns 30%, the letter said the Chinese government has “effective control of the company through multiple individual shareholders.” They said Li Zhen, the company’s founder, is a member of the Anhui Provincial Federation of Industry and Commerce, which takes direction from the Chinese government, and Guoxuan CEO Li Chen is a member of the Baohe District Chinese People’s Political Consultative Committee, a government advisory body. They also cited other minority owners as evidence of Chinese control.
“It is clear that the [Chinese Communist Party] CCP deliberately obscures its control and influence over Guoxuan, and thus Gotion, through this complex ownership structure,” said the letter, signed by Sen. Marco Rubio, R-Fla., and Reps. John Moolenaar, Bill Huizenga, Lisa McClain and John James, all Republicans of Michigan, and Michael Bost, R-Ill.
The lawmakers said CFIUS has already determined not to review Gotion’s purchase of 400 acres in Michigan for a battery plant. “Regardless if CFIUS reviewed this transaction,” the committee should specifically review Guoxuan High-Tech’s ownership of Gotion “to determine whether or not such ownership is covered by Section 1703 of the Foreign Investment Risk Review Modernization Act, which requires CFIUS to review investments that afford a foreign person ‘the management, operation, manufacture, or supply of critical infrastructure.’”
They added that President Joe Biden has identified electric vehicles and their lithium batteries as “critical parts of America’s transportation infrastructure,” and it’s “not in the interest of the United States to allow” China to control U.S. facilities that produce those batteries. “It is clear that CFIUS must conduct a closer review of Guoxuan High-Tech’s ownership of Gotion, Inc,” the letter said, adding that Treasury should conduct an “immediate CFIUS review, and if necessary, order the divestment of Gotion, Inc by Guoxuan High-Tech and its CCP owners.”