But the CCP has broadly used influence operations within the US to gain advantage for some time. These operations manifest in diverse ways, including China-friendly United States politicians and China-forward educational programs such as the since-curtailed Confucius Institutes. These CCP-directed outcomes are inherently bad for our country; any sincere attempt to deal with these issues requires isolation of the “root cause.”
In response to the indictment, Dr. Lawrence Sellin suggested that CCP spies don’t just infiltrate government agencies, but rather are placed into these sensitive roles as the result of pro-CCP non-governmental organizations (NGOs) mingling with state governments over time:
In many cases, our own government creates the conditions favorable for pro-CCP NGOs to be able to create influence. Consider China-owned businesses that have started popping up across the country – another poison fruit of CCP influence efforts in the US. These businesses are invited in by state-funded, quasi-governmental “economic development” agencies, which are in turn heavily influenced by pro-CCP “bi-lateral trade with China” NGOs.
Within roughly the past 20 years, several states have adopted an aggressive posture regarding “economic development,” and have even established and funded extra-governmental agencies (or empowered their Commerce Departments) to accomplish this objective. These economic agencies benefit from “confidentiality” clauses in the state’s legal code permitting secret deals and non-disclosure agreements (NDAs).
These agencies also receive massive funding from the state legislature, which they use to incentivize selected businesses to purchase land in that state. It’s a first-come, first-served model – with no discrimination regarding state or country of origin – all in the name of profitability and “good paying jobs.” A bureaucratic agency doesn’t have time for local businesses to grow, when tax dollars are burning a hole in its pocket. The result is state economic development maps checkered with the flags of other countries, like corporate badges on a NASCAR vehicle.
(Credit: Indiana Economic Development Corporation)
Why wouldn’t pro-CCP NGOs attach themselves to country-agnostic economic brokers fueled with tax dollars, operating beyond the reach of normal government oversight?
Following are case studies of “red” states that have adopted this “agency+NGO” formula; and the China-owned companies resulting in those states. Are they related?
Indiana has perhaps the most formalized implementation of the agency+NGO formula. Its big business deals are managed by the Indiana Economic Development Corporation (IEDC), Indiana’s public-private “economic development” agency requested by then-Governor Mitch Daniels and established by the state legislature in 2005. The IEDC receives annual budgets to the tune of $500M, and receives permission to draw from this appropriation based on anonymized business plans – hidden even from the state legislature approving the expenditures.
The Governor of Indiana is always the Chairman of the IEDC and appoints all of its board members – tying this organization to the Indiana state government. The IEDC also established a charitable foundation, the Indiana Economic Development Foundation (with an identical board), which allows the IEDC to receive private donations through the IEDF, which it uses for international “trade missions” for the Governor and his appointed board members.
Indiana is currently home to 25 China-owned businesses, among the highest of any state reporting this statistic. All were presumably facilitated by the IEDC. This tally nearly included Chinese corn processing company Fufeng, with which the IEDC was in negotiations for an Indiana location despite Fufeng having already been identified by the US Air Force as a national security threat. Only the timely action of the Indiana legislature prevented the deal earlier this year.
What’s driving this China-forward agenda? Indiana’s IEDC has a formalized relationship with an NGO called the America China Society of Indiana (ACSI). IEDC has paid ACSI, through a series of multi-year contracts, to provide a “pipeline of Chinese businesses” for IEDC-facilitated establishment in Indiana. This explains the supply (though not the demand) of disproportionately many Chinese businesses operating in Indiana compared to the other state-defined “adversarial countries” Russia, Iran, and North Korea.
Incidentally, ACSI was formed by Taiwanese-American and businessman Albert Chen. Why a Taiwanese immigrant would support China is hard to say.
How does ACSI curate a pipeline of Chinese companies to recommend to the state of Indiana? It is likely that the CCP directs which businesses expand into foreign countries and where, given that the CCP established its right to control even foreign subsidiaries through its 2017 National Intelligence Law. As well, companies expanding into the US tend to have several CCP members and possibly a committee. ACSI’s functional approach to coordinating China-owned businesses with the interests of the IEDC is almost certainly to act as a messenger receiving and conveying orders from the CCP.
Ohio, another state pushing big China business, has a more nuanced economic development setup. JobsOhio, Ohio’s economic development agency formed in 2011 under then-Governor Kasich, is a private, “self-funded” nonprofit. JobsOhio received its original seed funding in the form of the rights to high-spirit alcohol sales profits throughout Ohio, granted by the Ohio legislature and financed with bonds on a 25-year payment schedule. Essentially, the state of Ohio leased a perpetual source of public funding to the private NGO for a finite price, and left the long-term viability to JobsOhio to manage. This model must be working well, as claimed on the JobsOhio website: the employees of this 501(c)4 make an average $180k/year.
JobsOhio has been notably involved in establishing high-profile China-owned companies in Ohio, with help from pro-CCP NGOs and actors. JobsOhio, which profits from hard liquor sales, turns Ohio drunkenness into objectionable Chinese companies.
Illuminate USA, a partially China-owned solar panel maker that opened a factory in a Columbus suburb earlier this year, is profoundly unpopular with the locals, who do not want to support communist China. JobsOhio facilitated Illuminate USA’s establishment.
Tao Zhang, JobsOhio’s Director of Corporate Research, is also on the Board of Directors of the “Greater Columbus Chinese Chamber of Commerce.” Ohio has several regional Chinese Chambers of Commerce, the purpose of which can be most easily understood from the list of “benefits” on the membership sign-up page, including “access” to CCP-linked provincial Chinese government offices, China-based lawyers, and, of course, their Indiana friends, ACSI. According to his LinkedIn page, Tao Zhang is a relatively young man who graduated from Fudan University in Shanghai in 2011, and went to work at JobsOhio immediately after finishing graduate studies at Indiana University Bloomington in 2014.
JobsOhio allowed a recent Chinese immigrant, who also sits on the board of a Columbus-area pro-CCP NGO, to advance to the top of its leadership. Is it a surprise that a China-owned company turned up in the Columbus region against the wishes of its residents?
Eleven miles as the crow flies from the highly sensitive Wright-Patterson Air Force Base is the China-owned company Fuyao Glass America in Dayton. Fuyao opened back in 2016, also during the Governor Kasich tenure, to much fanfare and a limited-hangout Obama Netflix special about the challenges of multi-culturalism. Fuyao Glass was also welcomed in by JobsOhio, in coordination with the Dayton Development Coalition (DDC) – with the twist that a Fuyao executive was already on the board of the DDC at the time. How convenient. Fuyao is currently under investigation by the Department of Homeland Security for human trafficking and money laundering. That’s capitalism with Chinese characteristics.
What does all this mean? It means that we get what our government (and its pro-CCP friends) wants us to have. The states that have consolidated funding and power around the previously free-market concept of “economic development” want to fill up their globalist NASCAR dance cards. And if there is a pro-CCP NGO nearby, the priority will more likely be on China-owned businesses.
Consider the implications of China-owned businesses operating on purchased US land. It’s not on-shoring if China owns it. “Made in America” doesn’t matter if China owns it.
