Plans by China’s Gotion to build a $2.4 billion EV battery plant in Michigan have ignited significant local and political opposition. Despite the promise of 2,350 new jobs, many local politicians and residents have protested the project. by FDI Intelligence
Concerns center on the company’s ties to China’s Communist Party (CCP) and the use of taxpayer-funded incentives for foreign firms. This opposition highlights the growing scrutiny over Chinese foreign direct investment in the US, with national security and geopolitical concerns potentially reshaping future investment policies.
Kei Komuro, an associate in the global trade and national security practice at law firm Lowenstein Sandler, explains that Chinese investment in the US has stoked “significant apprehension” about business ties to the CCP. This centers on possible risks related to technology transfers “that could undermine US national security.” Komuro notes, “The pushback against FDI, particularly from China, has intensified compared to previous years.”
A recent survey supports this assertion, showing that 41% of voters hold negative views of FDI in their state, with national security concerns being a key issue.
Jonathan Samford, executive vice-president of the Global Business Alliance, adds, “Our nation’s complicated relationship with China is of bipartisan interest in Washington and shows no sign of diminishing after this year’s election.” This sentiment is reflected in legislative efforts like the No Official Giveaways Of Taxpayers’ Income to Oppressive Nations Act, which aims to prohibit CCP-affiliated companies from receiving green energy tax credits. Such measures underscore the tension between the economic benefits of job creation and the perceived threats to national security.
Despite the high-profile backlash, there remains “tremendous excitement” around FDI in the US, according to Hrishikesh Hari, a partner at Dechert LLP. He states, “There’s tremendous excitement around FDI in the US, and its future looks promising.” However, he acknowledges that this enthusiasm is not uniform across all investors, particularly those from China.
The future of FDI in the US, especially from China, is likely to be marked by increased regulatory scrutiny and evolving geopolitical dynamics, potentially impacting APAC investors’ appetite for investing in the US.
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