Say what?
You may not have heard of the company Microvast Holdings before, but you’ve certainly heard of the People’s Republic of China – controlled by the Chinese Communist Party.
Earlier this week, in my capacity as Ranking Member of the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee, I along with the Ranking Member of the full Committee sent a letter to the Secretary of the U.S. Department of Energy (DOE), Jennifer Granholm, asking for more information as to why DOE awarded TWO HUNDRED MILLION DOLLARS to Microvast Holdings. A company that, by its own admission, is regulated and controlled by the People’s Republic of China. Say What?
This is an electric vehicle battery manufacturing company. Now it is true its U.S. base is in Texas, but it is controlled by the Chinese Communist Party.
Shockingly, amid public and widely acknowledged national security concerns, the Department of Energy awarded this grant just two months ago.
What is even more shocking, is that it was not difficult to discover the company’s ties and reliance to the Chinese Communist Party. A simple search through their U.S. Securities and Exchange Commission (SEC) filings was all it took.
In fact, according to the tech investor website Nanalyze, nearly 80% of Microvast’s revenue assets are located in China.
Microvast disclosed the Chinese Communist Party’s control over its operations in their publicly available SEC filings:
“THE CENTRAL AND LOCAL PRC [People’s Republic of China] GOVERNMENTS CONTINUE TO EXERCISE A SUBSTANTIAL DEGREE OF CONTROL AND INFLUENCE OVER BUSINESSES OPERATING IN CHINA…”
“The PRC government exerts substantial influence over the manner in which we must conduct our business activities and may intervene, at any time and with no notice. If the PRC government at any time substantially intervenes, influences or establishes new policies, regulations, rules, or laws, such actions may result in a material change to our operations and/or the value of our common stock.”
As a member of the Subcommittee on Energy, I’ve witnessed first-hand DOE Secretary Jennifer Granholm acknowledge the energy and national security threats the Chinese Communist Party poses when involved in our supply chain. Why then would her agency award TWO HUNDRED MILLION DOLLARS to a U.S.-based company functionally controlled by the Chinese Communist Party?
It is well known at this point in time that the Chinese Communist Party’s laws and regulations require many U.S. businesses operating in China to partner with local Chinese entities. This exposes U.S. companies’ confidential proprietary and technological business information to the People’s Republic of China for their use.
In fact, the current FBI Director Christopher Wray at a recent speech publicly cautioned companies about partnering with Chinese businesses, “When you deal with a Chinese company, know you’re also dealing with the Chinese government.”
He candidly warned in the same remarks, “The Chinese government is set on stealing your technology—whatever it is that makes your industry tick—and using it to undercut your business and dominate your market.”
Business operations in Communist China are much different than most of the rest of the world. To encourage what the Chinese Communist Party calls the “modern enterprise system with Chinese characteristics,” it requires many state-owned and privately owned companies, and some foreign joint ventures, to create “Party Member Groups” within each companies’ management structure. Among other things, these committees promote the Chinese Communist Party’s economic plans.
I have written in the past about how the $1.2 trillion infrastructure package spent more new money on green policies than roads. Proponents claimed that some of the billions of dollars being spent would explicitly boost domestic manufacturing capabilities with the goal of freeing American supply chains from China. And the bill even directed DOE NOT to issue grants to companies that use battery material supplied by or originating from a foreign entity of concern or companies subject to the jurisdiction or direction of China.
But DOE did it anyway – say what?
Hard to believe!
I intend to discover what steps DOE took, if any, in investigating Microvast’s operations in China, what coordination the agency exercises with our national intelligence community before issuing such grants, and what percentage of DOE grant dollars have gone to other companies that are controlled by the Chinese Communist Party.
Awarding taxpayer dollars to a company with known and self-proclaimed ties to the Government of the People’s Republic of China raises serious concerns about DOE’s ability to manage the billions of dollars that have been put under their control and protect those dollars from exploitation by the Chinese Communist Party.