by Philip Lenczycki
The Chinese parent of a firm slated to develop a manufacturing facility near several Midwest military bases has extensive ties to the Chinese Communist Party (CCP), according to a Daily Caller News Foundation investigation based on research conducted by The Heritage Foundation Oversight Project and Heritage Action.
Cnano Technology USA Inc. (Cnano USA) plans to invest in a 333,000-square-foot facility in Johnson County, Kansas, that will manufacture liquid conductive paste for electric vehicle batteries and other devices, according to an August announcement from the Kansas City Area Development Council, which partnered with the state and other parties to attract the firm to Kansas. Cnano USA’s $95 million facility will be built approximately 35 miles from Fort Leavenworth, and 70 miles from the “only operational base for the B-2,” Whiteman Air Force Base.
Cnano USA is a wholly-owned subsidiary of C-Nano Technology Co., Ltd., which, in turn, is an entity that China-based Cnano Jiangsu Technology Co., Ltd. (Cnano Jiangsu) established in the British Virgin Islands, according to Cnano Jiangsu’s 2022 annual report.
“Cnano Technology USA Inc. is a wholly-owned subsidiary of C-Nano Technology Ltd. established in the U.S.,” Cnano Jiangsu’s 2022 annual report states.
“C-Nano Technology Ltd. is a limited company established in accordance with the laws of the British Virgin Islands and a wholly-owned subsidiary of The Company,” Cnano Jiangsu’s 2022 annual report adds, using “The Company” in reference to Cnano Jiangsu.
While Cnano Jiangsu’s 2022 social responsibility report reveals that the firm employs several dozen CCP members, the company’s English website states that it’s also “undertaken a number of national 863” projects, referring to a Chinese government program that the U.S. government has accused of working to steal U.S. technology.
“The number of Party members in the company has reached 28 people,” Cnano Jiangsu’s 2022 social responsibility report states.
Wisconsin Republican Rep. Mike Gallagher, who serves as chairman of the House Select Committee on the CCP, told the DCNF that such ties are cause for concern.
“Just ask yourself the question: can Americans buy land in China near its military bases? Of course, the answer is no,” Gallagher said. “It is a bad, bad idea to let the CCP or CCP-affiliated entities buy land near military bases in the U.S. We cannot allow the CCP to collect valuable intelligence here at home that they might leverage in the event of a crisis.”
A DCNF review of Cnano Jiangsu’s corporate records revealed that the firm promotes CCP ideology and that the number of Party members in the company has increased in recent years. At the same time, the firm’s business filings also state that the Chinese government has awarded Cnano Jiangsu with millions of dollars for participating in various state-backed initiatives, including one program that the Office of the National Counterintelligence Executive has warned employs clandestine methods to acquire foreign technologies. The records do not disclose which employees and/or executives were CCP members.
“American citizens deserve to know whether foreign companies seeking business in their communities are operating in good faith or aiming to advance the interests of communist regimes,” Mike Howell, director of The Heritage Foundation’s Oversight Project, told the DCNF.
‘Join The Party’
Cnano Jiangsu’s business filings with the Shanghai Stock Exchange reveal that the billion-dollar company operates a CCP Party branch, promotes Party doctrine and likewise supports the CCP’s integration into the firm’s corporate structure.
A “Party branch” is the smallest “grass-roots” CCP organization, and one must be established within any Chinese institutions containing three or more Party members, according to China’s state organ for legal supervision, the Supreme People’s Procuratorate.
Party organizations within private companies “guide and oversee enterprises in obeying state laws and regulations, unite their employees, safeguard the legitimate rights and interests of all parties and promote the sound development of their enterprises, with a focus on carrying out the [CCP]’s principles and policies,” according to the CCP Central Committee’s Organization Department.
In 2018, Cnano Jiangsu established its first Party branch, according to the firm’s 2021 social responsibility report. By the end of 2022, Cnano Jiangsu employed 28 CCP members who accounted for “3.54% of all workers,” according to the firm’s 2022 social responsibility report.
“Pay close attention to politics and join the Party,” the 2022 report states.
Cnano Jiangsu’s Party branch holds Party classes as well as “focused study sessions” to “study the spirit of General Secretary Xi Jinping’s important speeches,” according to its 2021 annual report.
Furthermore, the firm also supports “the deep integration of Party-building and corporate governance,” according to its 2021 social responsibility report.
Cnano Jiangsu’s allegiance to the CCP extends well beyond its Party branch, according to its 2022 social responsibility report, which states that the firm itself “insists on being guided by Xi Jinping Thought On Socialism With Chinese Characteristics For A New Era.”
First unveiled in October 2017, Xi’s trademark ideology identifies eight “fundamental issues” for the Party, which include “the Party’s goal of building a strong military in the new era,” according to state-run media outlet Xinhua.
“One of my top priorities continues to be preventing China from expanding its foothold in American supply chains and ensuring CCP-backed companies are not operating in Kansas,” Kansas Republican Rep. Jake LaTurner told the DCNF. “Xi will stop at nothing to infiltrate our most critical infrastructure, steal our intellectual property and gain insight into our military operations.”
‘Technology Transfer’
Cnano Jiangsu’s 2022 social responsibility report states that in 2012, the company joined the Chinese government’s “863 Program,” which supports the development of China’s military, according to the Select Committee of the United States House of Representatives.
Launched in 1986, the 863 Program “provides funding and guidance for efforts to clandestinely acquire U.S. technology and sensitive economic information,” according to the U.S. Director of National Intelligence. State-run media outlet Xinhua reported that the 863 Program was incorporated into the National Key Research and Development Program of China in 2016, though the 863 Program remained listed as an active, independent program on the Ministry of Science and Technology’s website until at least 2018.
All the same, Cnano Jiangsu also began a project with the National Key Research and Development Program of China in November 2018 that had no stated end date, according to a 2019 business filing.
Cnano Jiangsu’s 2019 business filing states that it participated in the “National Key Research and Development Program of China” related to “developing a green macro-preparation method for the edge functionalization of graphene, equipment and production technology,” with its contract period being listed between “November 2018 – Projection Completion.”
“Participation in the 863 Program, financial incentives and who knows what else in terms of state subsidies, means that [Cnano Jiangsu and Cnano USA] are seen as essentially a partner of the government,” Bryan Burack, senior policy advisor for China and the Indo-Pacific at the Heritage Foundation’s Asian Studies Center, told the DCNF.
Burack and Mandy Snodgrass of Heritage Action conducted an initial investigation into Cnano Jiangsu and Cnano USA, which the DCNF reviewed and expanded upon.
The 863 Program “focuses on both military and civilian science and technology” and aims “to accelerate the acquisition and development of science and technology in the PRC,” according to a report from the Select Committee of the United States House of Representatives. Toward that end, the 863 Program regards technologies like biological warfare, nuclear weapons and exotic materials as “areas of military concern.”
Between 2009 and 2013, China spent over $800 million per year on the 863 Program, according to a research report prepared for the U.S.-China Economic and Security Review Commission by Gryphon Scientific, LLC, an independent research firm.
The Chinese government has awarded parent company Cnano Jiangsu over $7 million dollars for its participation in various state-backed initiatives — at least $160,000 of which China’s Ministry of Science and Technology awarded the firm for its participation in the 863 Program, according to the company’s 2022 social responsibility report.
Moreover, Cnano Jiangsu’s 2023 foreign investment plans explicitly identify “technology transfer” as an element of Cnano USA’s “business scope.”
“Business scope: engage in research and development for nano materials (carbon nanotubes, graphene) and other composite materials, produce and market company products; provide the company with technical services, consulting, training and technology transfer,” the business filing states.
Like fellow Kansan Rep. Jake LaTurner, Kansas Republican Sen. Roger Marshall told the DCNF he was “concerned” about Cnano USA’s plan to build a facility in his state.
“When this was brought to our attention, we alerted the Kansas Bureau of Investigations (KBI) and asked them to review this company and its origins,” Marshall said. “I look forward to their findings and want to know what guardrails are in place to ensure our national security is prioritized above all else.”
If and when completed, Cnano USA’s facility will be located at the New Century Commerce Center in Johnson County, and is expected to create 112 jobs, according to VanTrust Real Estate, which developed the commerce center.
‘Second Cold War’
Cnano Jiangsu has also interacted with the CCP’s United Front Work Department (UFWD) on several occasions, according to Chinese government and state-run media reports.
The UFWD conducts “united front work,” which is a “blend of engagement, influence activities and intelligence operations” that the CCP employs to shape policy toward China and “gain access to advanced foreign technology,” according to the Select Committee on the CCP.
In one instance, the UFWD and state-run media outlet Xinhua reported that, in June 2021, Cnano Jiangsu participated in a UFWD event in Jiangsu province titled “Serving Overseas Chinese Enterprises.” UFWD and CCP officials attended the event, which focused on challenges “Overseas Chinese enterprises” encounter, Xinhua reported.
The UFWD’s report notes that during the event “persons in charge of Cnano Jiangsu” and other firms “shared their experiences and work situation.”
Chinese Times reported that Cnano Jiangsu’s CEO, Zheng Tao, attended the event, and shared his experience concerning Chinese enterprises operating in foreign markets. Zheng Tao is also Cnano USA’s “director,” according to Cnano Jiangsu’s 2023 business filing.
The following month, Zheng Tao contacted the UFWD in July, hoping that the agency might expedite the processing of his China travel visa, according to JinShang Online.
“On July 26th, Cnano Jiangsu’s CEO, Zheng Tao, was still in the U.S., but because of the firm’s production operation needs, he’d already reserved an August 14th China return ticket, however, because time was tight, going to the New York Chinese Consulate to sort out the entry visa invitation to travel to China had not been arranged in advance, so he hoped that the city’s UFWD (the city’s Overseas Chinese Affairs Office) would be able to help him,” Cnano Jiangsu’s office director, Sun Min, reportedly told JinShang Online.
Consequently, the UFWD worked with Chinese agencies to ensure Zheng Tao’s China travel visa was processed in time, JinShang Online also reported.
Former U.S. ambassador Joseph Cella told the DCNF that the U.S. should be wary of CCP-tied Chinese companies seeking to establish a U.S. presence.
“The deals may appear benign, however, they are perilous and need to be engaged transparently and submitted to strict scrutiny and due diligence,” said Cella, who serves as director of the Michigan-China Economic and Security Review Group. “We are involved in a second Cold War now with China.”
A DOD spokesperson told the DCNF that the Pentagon will “identify and mitigate risks across all domains,” when asked about Cnano USA’s plans to build near U.S. military installations.
The FBI’s National Press Office declined to comment.
Cnano USA, Cnano Jiangsu, Zheng Tao and Johnson County officials did not respond to multiple requests for comment.
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Philip Lenczycki is a reporter at Daily Caller News Foundation.
