Gotion Exposed: How Did a CCP-Controlled Military-Linked Dishonest Company Get US Approval? (Part 1)
Hello, everyone, welcome to Inconvenient Truths. I am your host Jennifer Zeng.
On June 13th, the Biden administration approved the controversial plan of China's Gotion High-Tech to build a large EV battery factory in Michigan. The project has an investment of $2.4 billion, and Gotion will receive a grant of $175 million from American taxpayers, along with a 30-year, $540 million tax incentive.
There are two main reasons why this project sparked controversy: whether Gotion poses a threat to US national security and its impact on the local environment. The approval indicates that the Biden administration believes it does not pose a national security threat.
In today's episode, I will present three key facts: 1) Gotion has a military background; 2) Although Volkswagen is the largest shareholder of Gotion, the actual control remains in the hands of its Chairman and CCP Party Committee Secretary Li Zhen; 3) Gotion has been punished by the China Securities Regulatory Commission for misconduct and dishonesty. After you have seen the facts I present, I believe you will come to a different conclusion than the Biden administration.
Due to the abundance of exclusive content that I have uncovered, I will release this program in two parts.
First, let's briefly discuss the background.
After a month of review, the Committee on Foreign Investment in the United States determined on June 13th that Gotion High-Tech does not fall under the jurisdiction of the Defense Production Act, allowing them to build the factory in Michigan.
Prior to this decision, Gotion faced strong opposition from local residents and some lawmakers. To address this, they "voluntarily" submitted materials for review by the Committee on Foreign Investment.
In October of last year, Michigan's Democratic Governor, Gretchen Whitmer, announced that Gotion would invest 2.4 billion dollars to establish two factories covering 5.5 million square feet in Michigan, along with other facilities spread across 260 acres.
In April of this year, the Michigan State Senate approved the plan with a 10 to 9 vote and gave Gotion a grant of $175 million. The project will be located in Green Charter township, near Big Rapids in Mecosta County.
The announcement of this news has sparked dissatisfaction and protests among the local people.
Even on the evening of June 13th, when the project received approval from the U.S. federal government, local residents gathered at the Township board meeting, holding signs that read "No CCP" and "No Go On Gotion" to protest, even though the topic was not on the agenda. That's a brief introduction to the latest developments in this matter.
Now let's focus on today's key points.
Key Point 1: Gotion High-Tech's military background
Let's take a look at an overview of Gotion High-Tech.
In the company profile, it states, "The company has been awarded the 'National Torch Program Key High-Tech Enterprise'... and three key national '863' projects'."
Those familiar with Chinese affairs would know that once we mention the "National Torch Program" and the "863 Program," the military background becomes evident.
In fact, the so-called 863 Program started in March 1986 and was established by the CCP to counter the U.S.'s "Star Wars" program. It mainly focuses on research projects related to military and national security, and it is also an important reason for the overall improvement of the CCP's People’s Liberation Army's combat capabilities.
An article published by The Epoch Times in 2009 titled "The Chinese Communist Party's Top-Secret 863 Program and Chinese Spy Cases" stated that from 1983 to the year the article was published in 2009, the total investment in the 863 projects had exceeded $700 billion, with over 83% of the technology applied in military-related fields.
In 1993, U.S. intelligence agencies discovered that the 863 Program was targeting major developed countries such as the US. The CCP's military intelligence system directly participated in the program's guidance, funding, and even conducted economic espionage activities against the US through this program.
An article published in 2016 in "China Automotive News" titled "Military Enterprises Accelerate Integration of Subsidiary Component Businesses" states,
"In this round of industry integration in the military enterprise's component sector, emerging sectors such as batteries, electronic controls, and automotive electronics have clearly become the focus of restructuring."
"At the beginning of the year, China Aerospace Wanyuan and Gotion High-Tech cooperated, which fully reflects China Aerospace Wanyuan's active expansion into the new energy vehicle market. China Aerospace Wanyuan's announcement stated that their joint venture company will strengthen the research and application of military energy storage products, with a focus on promoting the application of power batteries in military vehicles and ships.”
Now let's take a look at this in-depth industry report titled "Mid-term Investment Strategy for Machinery Military Industry in 2022," published by Capital Securities on July 5, 2022.
In this report, Gotion is listed as a "leading battery manufacturer," ranking fourth in China in terms of installed capacity for both 2021 and 2020.
The report also states that Gotion’s planned capacity for 2025 will exceed 300-gigawatt hours (GWh).
Due to time constraints, we won't delve further into this, but I think we have already demonstrated Gotion's military background.
It's worth noting that the concept of "civil-military integration" in China is increasingly recognized internationally.
In other words, in China, there is no absolute boundary between civilian and military enterprises. Many civilian companies and research institutions also undertake military research projects, and military research achievements are widely used in civilian products. The level of integration between the military and civilian sectors is quite high.
Key Point 2: Gotion High-Tech is a CCP’s enterprise
Now let's discuss the second key point, which is that Gotion is a CCP’s enterprise.
Its founder and chairman, Li Zhen, is also the Party Committee Secretary of Gotion.
Let's take a look at this report: "Gotion High-Tech Party Committee Secretary and Chairman Li Zhen: Developing with a Sense of Mission." This is a speech by Li Zhen published on China Industry News Network in 2016. We won't go into the content because the title already confirms Li Zhen's identity as the Party Committee Secretary. If there is a Party Committee Secretary, then there must be a Party Committee in Gotion.
Next, let's look at the "Video Promotion" section on Gotion's Chinese website. The title of the video at the top center is "Gotion High-Tech Launches Series of Activities Celebrating the 100th Anniversary of the Party's Founding." When you click on it, you'll see a tightly edited and grandly produced video.
Now let's watch this video together. It contains only one line of speech. I recorded it from their website and provided an English translation.
The one leading everyone to take the Party oath is Li Zhen. Of course, Li Zhen has long been a Party member. He was born in 1964 and served as a member of the 9th and 10th Anhui Provincial Political Consultative Conference, a standing committee member of the 8th Anhui Provincial Association for Science and Technology, and a representative of the 13th and 14th Hefei Municipal People's Congress.
However, I couldn't find the exact year of his Party membership.
In 2016, according to the "Hurun Rich List," the Li Zhen family became the wealthiest in Anhui Province with a fortune of 14 billion yuan, or $1.96 billion, ranking 195th nationwide.
It should be noted that this video dedicated to the 100th anniversary of the CCP's founding is not available on the company's English website. It is only on the Chinese website.
On the third page of Gotion’s video promotion section, there is a video titled "Me and My Motherland - Gotion Version."
This video production is even more grand and exquisite, serving as a gift from Gotion to celebrate the 70th anniversary of the CCP regime's establishment.
Based on my estimation, this video must have cost millions, if not tens of millions, to produce. The entire video is a song, with a duration of 3 minutes and 37 seconds. I have also downloaded it and added English subtitles.
To save time, I won't play it in full now, but I'll play it for everyone at the end of the show as entertainment.
However, from this, you can also see Gotion's eagerness to express loyalty to the CCP and their willingness to spare no expense.
Key Point 3: Li Zhen is the actual controller of Gotion, and Gotion could have deceived the US government.
Now let's take a look at an article published on Sina.com.cn, one of the major portals in China, in October last year. The title is "Gotion High-Tech Defies the Trend and Invests $2.4 Billion to Build a Factory in the United States, Who Will Follow Suit?"
The article mentions that on October 5, the Michigan Strategic Fund approved a tax incentive program for Gotion, providing a total of at least $715 million in funding support for Gotion.
The article states, "Since the signing of the U.S. Inflation Reduction Act (IRA) on August 16, the provisions regarding subsidies for new energy vehicles have sparked significant controversy, especially the exclusion of 'Foreign Entity of Concern’ clause, which disqualifies models equipped with Chinese power batteries from receiving subsidies. After the bill was announced, several Chinese battery companies announced the suspension of their plans to invest in and build factories in the United States.
"The impact of the Inflation Reduction Act is the greatest uncertainty for Gotion's investment in building a factory in the US. According to the provisions of the IRA, vehicles equipped with batteries from 'Foreign Entity of Concern’ will not be eligible for any subsidies. There are mainly two clauses related to Chinese companies in the definition of 'Foreign Entity of Concern’."
This is a list of clauses that may affect Gotion's investment in building a factory in the US, as mentioned in the article.
The article states, "In clause C, the term 'covered nation' currently refers to China, Russia, North Korea, and Iran. State-owned enterprises belong to 'Owned by, controlled by a government,' and regardless of the type of enterprise, they fall under 'Subject to Jurisdiction or direction of a government.'
Therefore, all Chinese companies can be defined as 'Foreign Entities of Concern.' Clause E grants the U.S. government discretionary power to define any entity as a ' Foreign Entity of Concern’.'"
The article continues, "The triggering conditions of the IRA are currently unclear, but regarding Gotion's investment in building a factory in the US, it can be determined that there are two main favorable conditions to address the IRA:
"1. Volkswagen is Gotion's largest shareholder, holding 26.5% of the shares…Current reports in the U.S. media emphasize this information and use it to determine that Gotion is not considered a 100% Chinese company. If the factory is jointly built by Gotion and a U.S. automaker, the likelihood of the company's products qualifying for subsidies will be higher.
"2. Strong support from the local government."
From this article, we can conclude that the most important reason why Gotion ultimately obtained approval from the Committee on Foreign Investment in the United States (CFIUS) is that it provided evidence that Volkswagen is its largest shareholder and that Gotion is not a 100% Chinese company.
According to a report of Mlive in Michigan, Chuck Thelen, vice president of Gotion Inc. North American Manufacturing, stated, "We voluntarily submitted all the needed documents to the U.S. Department of Treasury Committee on Foreign Investment in the U.S. to be transparent and accountable and received the response that it is not a covered transaction."
Now let's take a look at Gotion's equity structure:
Since Gotion is a publicly traded company, this kind of information is publicly available online.
According to this table, the largest shareholder of Gotion is Volkswagen (China) Investment Co., Ltd., holding 24.77% of the "restricted circulating shares."
The second-largest shareholder is Nanjing Gotion Holdings Group Co., Ltd., with 9.6%, followed by Li Zhen with 5.81%, Hong Kong Securities Clearing Company Limited with 2.92%, Citibank, National Association with 2.43%, and Li Chen, who is Li Zhen's son, with 1.6%.
I won't read out the rest, but three of the other shareholders are securities investment funds under three banks, except for Foshan Electrical and Lighting Co., Ltd.
Therefore, based on this publicly available information, Volkswagen (China) Investment Co. is indeed the largest shareholder of Gotion. If Gotion uses this information to prove that it is not a 100% Chinese company, it may indeed be recognized.
An article published by the Chinese media outlet The Paper also states, "In the eyes of some industry insiders, Gotion's breakthrough in the U.S. market is subtly related to Volkswagen China being its largest shareholder."
The article also states that Gotion has been planning its global layout for a long time, and "in terms of the advance into the U.S. market, Gotion is even faster than China's leading power battery company, Contemporary Amperex Technology Co. Ltd. (CATL)."
The article raises the question, "How did Gotion achieve such a significant breakthrough in the heavily guarded U.S. market?"
The author of the article then provides the answer himself. One reason is that Gotion established a research institute in Silicon Valley as early as 2015, "which gives them a better understanding of U.S. policies and related processes, providing them with certain advantages.”
And another reason is the alliance with Volkswagen. Besides receiving investment from Volkswagen, it is also due to the fact that Volkswagen is its largest shareholder, which allowed Gotion to achieve a "breakthrough" in the United States.
However, what role does Volkswagen, as Gotion's largest shareholder, play in its major affairs and daily operations?
Due to time constraints, we will leave this question for discussion in the next issue.
OK, that’s all for now. Thank you for watching.
Please subscribe to my channel if you haven't already, and make sure you are still subscribed if you are. If you enjoy my content, please help spread the word about my channel and videos.
You can also visit my website at jenniferzengblog.com, sign up for a membership, or make a donation to support my efforts.
Thank you, and I look forward to seeing you in the upcoming second part of this show!
6/16/2023 **
Truth saves lives. Please support! 👇 真相能救命，敬請支持！👇
🌺Donate 捐款贊助： https://donorbox.org/support-inconvenient-truths-by-jennifer-zeng
🌺Membership 註冊會員：https://bit.ly/3biCEk5
🌺Bitcoin 捐款：bc1qlkkvwyvw96x3xx6jgzkhlnnv0nv3d9vm078vfd
㊙️Website 網站：https://www.jenniferzengblog.com/
㊙️English Channel 英文頻道：https://www.ganjing.com/channel/1eiqjdnq7go5GC80HDYaulKCR1pi0c
㊙️Chinese Channel 中文頻道：https://www.ganjing.com/zh-TW/channel/1eiqjdnq7go17GTbRr3vPiSwD1cp0c
㊙️LBRY.tv: https://lbry.tv/@InconvenientTruths:c
㊙️Rumble: https://rumble.com/c/InconvenientTruthsbyJenniferZeng
🍀Twitter 推特：https://twitter.com/jenniferzeng97
🍀FB Page臉書: https://www.facebook.com/jenniferzeng97
🍀SafeChat帳戶: https://safechat.com/user/1341871762892058624
🍀Gab: https://gab.com/JenniferZeng
🍀MeWe: https://mewe.com/p/inconvenienttruthsbyjenniferzeng
👉Jennifer’s Bio 曾錚簡歷：https://www.jenniferzengblog.com/about/
