More than a decade’s worth of advanced American technology is about to be handed to the Chinese at a creditors’ sale. Democrat Ike Skelton, chairman of the U.S. House Armed Services Committee from 2007 to 2010 and Republican Duncan Hunter, chairman of the same Committee from 2002 to 2006, urge the government to move quickly to prevent this hand-over.
The technology in question consists of advanced lithium-iron phosphate batteries. According to Skelton and Hunter, these batteries are expected to play a major role in modernizing the complex system by which 21st century electricity will be generated and distributed. It is also will help confer an advantage in the battlefield, where our troops rely on “a dizzying array of high-technology equipment including night vision goggles, digital radios, encryption gear and global positioning systems.”
But under a decision of a federal bankruptcy judge, the company whose patents comprise the cutting edge of this technology, A123 Systems, Inc., will soon become the property of China’s Wanxiang Group, a leading Chinese manufacturer, for the relative bargain price of $250 million. Wanxiang Group’s president, one of China’s wealthiest men, has served on the annual National Communist Party Congress for 44 years.
The bankruptcy court’s auction is subject to approval by an obscure federal interagency panel known as the Committee on Foreign Investment in the United States. The Committee’s own annual report warns that “there is likely a coordinated strategy” underway by unnamed foreign powers “to acquire U.S. companies involved in research, development, or production of critical technologies for which the United States is a leading producer.” The Wanxiang Group’s purchase looks like part of that coordinated strategy.
Wangxiang has sought to win approval of the deal by agreeing to split off A123 Systems’ existing military contracts to an American corporation. But Skelton and Hunter don’t find this reassuring because “it is A123 Systems’ technology that is the issue, not its contracts.”
The trade secrets and patents that would be controlled by the Wanxiang Group are the product of a decade of trial and error by some of America’s finest scientists, with much of the work funded by U.S. taxpayers. But Skelton and Hunter warn that if the Committee on Foreign Investment in the United States fails to act, Americans may find that, notwithstanding this work, we depend on China for the battery power needed to rebuild our energy grid. We may also find ourselves “being watched from above by Chinese spy satellites powered by technology we paid for and developed.”