Chinese businesses hoping to expand in US face uncertainty

WASHINGTON

It was billed as the “biggest ever economic development project” in north Michigan when Gov. Gretchen Whitmer in 2022 welcomed a Chinese lithium-ion battery company’s plan to build a $2.36 billion factory and bring a couple thousand jobs to Big Rapids.

But now the project by Gotion High-Tech is in the crosshairs of some U.S. lawmakers and local residents.

Leading the charge is Republican Rep. John Moolenaar of Michigan, chairman of the House Select Committee on China, who accuses the Chinese company of having ties to forced labor and says he fears it could spy for Beijing and work to extend China's influence in the U.S. heartland. Gotion rejects the accusations.

Lured by the large U.S. market, Chinese businesses are coming to the United States with money, jobs and technology, only to find rising suspicion at a time of an intensifying U.S.-China rivalry that has spread into the business world.

U.S. wariness of China, coupled with Beijing's desire to protect its technological competitiveness, threatens to rupture ties between the world's two largest economies.

That could hurt businesses, workers and consumers, which some warn could undermine the economic foundation that has helped stabilize relations.

“This is a lose-lose scenario for the two countries,” Zhiqun Zhu, professor of political science and international relations at Bucknell University, said.

“The main reason is U.S.-China rivalry, and the U.S. government prioritizes ‘national security’ over economic interests in dealing with China.”

Lizhi Liu, an assistant professor of business at Georgetown University, said the trend, along with the decline of U.S. investments in China, could hurt China-U.S. relations.

“Strong investment ties between the two nations are crucial not only for economic reasons but also for security, as intertwined economic interests reduce the likelihood of major conflicts or even war,” she said.

But U.S. lawmakers believe the stakes are high. Sen. Marco Rubio said at a July hearing that China is not only a military and diplomatic adversary for the U.S. but also a “technological, industrial and commercial” opponent.

The bipartisan House Select Committee on China has warned that widespread adoption in the US. of technologies developed by China could threaten long-term U.S. technological competitiveness.

U.S. public sentiment against Chinese investments began to build up during President Barack Obama's administration, in a pushback against globalization, and were amplified after President Donald Trump came into office, said Yilang Feng, an assistant professor of business at University of Illinois at Urbana-Champaign.

“The scale has increased, so has the intensity,” Feng said.

Data by the U.S. Bureau of Economic Analysis show the total investments by China in the U.S. fell to just under $44 billion in 2023, from a high point of $63 billion in 2017.