Planned US Rare Earth Factory Tied to China Footprint | China In Focus 2023-09-27 01:34

The Pentagon has plans for a rare earth magnet factory in the U.S. The company it's tapping to do it carries a major China footprint. Ford is holding construction of a $3.5 billion electric vehicle battery plant. What's behind the change of heart? A new round of sanctions from Washington on export controls. Who's on the blacklist? And what really caused the deadly Maui wildfires? A pro-China campaign is pointing fingers at the U.S. But is that the truth? What do you think? Let us know below and subscribe if you haven't already. Welcome to China In Focus. I'm Tiffany Meyer. Less reliance or more exposure. Washington wants to build up its domestic rare earth supply chain. But the company it's tapping to help has a big China footprint. Last week, the Pentagon announced an award of nearly $95 million to a company named EVAC Magnetics. Rare earth magnets power electric vehicles, wind turbines and smartphones. And they're critical for both military and industrial uses. America's dependency on Chinese imports for them has been deemed a national security threat. So the goal is to make them in the U.S. Reacting to the Pentagon's EVAC investment, the head of a major U.S. mineral company described the move as historic. That's after a major maker of advanced magnets in the U.S. was sold and moved to China decades ago. But there's more to the story. EVAC is part of a German company that produces the largest rare earth magnets in the West. But it's deeply exposed to China. Here's why. A quarter of its employees work there. And it has a big production plant in the country. Plus, it owns 49 percent of a Chinese joint venture with China's largest state-owned rare earth manufacturer. And the state manufacturer's controlling shareholder sits directly under the state council, China's lawmaking cabinet. So what could relying on EVAC to reduce China dependence mean for Washington? Despite the hidden risks that come with it, where will the firm source its raw materials? And how will the product be used in America? We'll bring you an in-depth report soon for more details. What caused the deadly fires in Maui? A shocking claim swiftly spreading online says the U.S. intentionally set the Hawaiian blaze. But on a closer look, the information appears to debunk itself. And the source of it comes from China. That's according to the New York Times. The wildfires tore through Maui in early August. Everything was burning around, explosions, cars blowing up. Like embers and fire, we couldn't breathe. The devastating blaze is considered among the country's deadliest disasters, killing at least 97 people. So what's the propaganda from China all about? First, the accusation cited a so-called explosive new report from Britain's intelligence agency MI6. The so-called report claims the U.S. military started the deadly fire in Maui during a secret weather weapon test. It adds that with this weapon, the U.S. military can cause floods, volcanic eruptions and extreme storms to damage its, quote, enemies. The message has spread across a dozen major platforms, from mainstream Chinese media to Facebook, YouTube and X, formerly Twitter. The statement also appears to contradict itself. A Chinese post in August asserted that MI6 identified the Maui wildfires so-called source after, quote, months of investigation. Yet that fire broke out just 16 days before the article was published. What's more, there's no evidence the U.S. military is developing a weapon that summons fire or floods. A Hawaiian electric utility has acknowledged its power line started the first fire on Maui. It's not the first time Beijing has used disinformation to target Americans. In July, a cybersecurity firm found over 70 fake news websites and social media accounts spreading political messaging from Beijing. The campaign also allegedly staged two in-person protests in Washington, D.C. and put up a pro-Beijing billboard in Times Square. Ford is halting construction of a $3.5 billion electric vehicle battery plant. The Michigan-based project has thrown criticism over its links to China. Here's more. In a statement on Monday, Ford said it's pausing construction of a $3.5 billion EV battery plant in Marshall, Michigan, until it is confident it can run the factory competitively. Ford didn't name any specific factors behind the decision, but said, There are a number of considerations. We haven't made any final decision about the planned investment there. In February, Ford announced plans to build the plant. The automaker plans to employ about 2,500 workers to make lower-cost batteries for various new and existing vehicles. The factory was to start producing batteries in 2026, aiming to supply 400,000 vehicles per year. The project has faced criticism over its involvement with Chinese company Contemporary Amperex Technology, or CATL, the world's biggest EV battery maker. As part of a licensing agreement, CATL will provide the EV battery technology, some equipment, and workers, while a U.S.-based Ford subsidiary will own the factory and employ the workers. The halting of construction also comes amid an unprecedented strike by the United Auto Workers Union. In a statement posted on social media, the union president called Ford's decision to halt production a shameful, barely-veiled threat to cut jobs. President Biden is leaning into diplomacy with leaders of 18 Pacific Island nations. He's hoping to curb China's expanding influence into the region, which Washington considers strategically crucial. Let's take a closer look. Our objective is to build a better world. One of the great opportunities for security, prosperity, and dignity for all our people. Pacific Island leaders gathered Monday for the start of a two-day Washington summit. Before hosting the 18-member Pacific Islands Forum Summit, President Biden announced U.S. diplomatic recognition for two more Pacific Islands nations, the Cook Islands and Niue. Mr. President, you wisely stated that no nation can meet the challenges of today alone. Last year, Biden hosted an inaugural summit of 14 Pacific Island nations. He pledged to help islanders fend off China's economic coercion, saying they shared a vision for a region where democracy will be able to flourish. Competition is heating up between China and the U.S. for influence with the Pacific states. And Beijing has already become one of the biggest national lenders to the region. During the summit on Monday, Biden said recognizing the Cook Islands and Niue would enable the U.S. to expand the scope of the country's partnership and tackle challenges. Biden pledged to help provide another $200 million in new assistance for the region. A joint statement between parties agreed to hold another summit in 2025 and political engagements every two years thereafter. Now let's dive into some brief headlines from the Indo-Pacific region. U.S. Army General Randy George attended the Indo-Pacific Army Chiefs Conference in India Tuesday. There, he said he hopes to quote, maintain a free and open Indo-Pacific. 35 national delegates and 20 army chiefs joined the meeting. Washington has vowed to allocate more diplomatic and security resources for the Indo-Pacific to counter China's influence there. India's defense minister highlighted the complex security challenges faced by the region, including boundary disputes and piracy. Meanwhile, South Korea just held its first large-scale military parade in a decade, sending a signal to its communist neighbor North Korea. Drones, missiles and helicopters rolled through the streets of Seoul in a show of force. South Korea's president pledged to step up its military capacity, saying that the country will be ready to fight if Pyongyang ever uses nuclear weapons. He added that his nation will stand firm, asserting its power for peace. Back to the South China Sea, China's foreign minister on Tuesday told the Philippines not to provoke or seek trouble. That's a day after the Philippines removed a floating barrier set up by China. The string of buoys were meant to prevent Philippine vessels from entering a disputed shoal in the sea, an area China claims as its own. The Philippine Coast Guard said the barrier violated international law and that troops removed it by presidential order. Back to South Korea, the nation will soon host a rare trilateral talk in Seoul. And on the guest list, senior diplomats from neighboring China and Japan. Officials from the three countries are looking to resume talks after a four-year hiatus. China's relations with South Korea deteriorated years ago over the regime's military ambitions and the deployment of a U.S. anti-missile system. Talks were also halted due to disputes stemming from Japan's past occupation of Korea. The three nations have confirmed that the meeting will happen at the quote earliest convenient time. The U.S. dealt out a new round of sanctions against Chinese and Russian companies on Monday. That's over accusations they helped Russia evade U.S. expert controls to make drones for its military. NTD's Jeremy Sandberg has more on the freshly blacklisted firms. The Biden administration imposed new trade restrictions on 11 Chinese and five Russian companies on Monday, accusing some of supplying drone components for Russia's military. The Commerce Department added a total of 28 firms to a trade blacklist, making it harder for U.S. suppliers to ship them technology. The blacklist also includes companies in Pakistan, Finland, Oman, Germany, and the United Arab Emirates. Nine of the companies allegedly took part in a scheme to supply Russia with drone parts through a previously blacklisted Russian defense contractor called Special Technology Center. An investigation led by Reuters last year uncovered a logistical trail that spans the globe, ending at the Special Technology Center in St. Petersburg, Russia, at the Orlan drone production line. The investigation found China-based exporter Asia Pacific Links has been among the most important suppliers to Russia's drone program. The firm was the target of a previous round of U.S. sanctions in May, along with Russian import company SMTI Logic. Commerce Department export controls chief Alan Estevez stated the U.S. will not hesitate to take swift and meaningful action against those who continue seeking to supply and support Putin's illegal and immoral war in Ukraine. The department alleges six of the Chinese regime entities added to the blacklist procured aerospace parts for Iran for its drone attacks on oil tankers in the Middle East. Secretary of Commerce Gina Raimondo says her department has put more than 700 Chinese entities on the entity list, and that over a third of them were added under the Biden administration. The Commerce Department finalized rules to prevent funding from the $52 billion Chips and Science Act going to foreign countries like China and Russia or any entities of concern. It says it's meant to ensure companies receiving government funds do not undermine U.S. national security. Jeremy Sandberg, NTD News. Taiwan President Tsai Ing-wen highlighting a shared goal with Australia this week, safeguarding a free and open Indo-Pacific region. I believe with the support of everyone here, both sides will have fruitful cooperation. She met with Australian lawmakers visiting Taipei Tuesday. Australian lawmaker Josh Wilson echoed her message, saying Canberra is committed to working with Taiwan and other partners to protect stability in the region. Other lawmakers described Taiwan as an important economic partner for Australia. Tsai also called on Australia to support Taiwan's bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Taiwan and China both applied to join the landmark trade pact in 2021. The Chinese Communist Party opposes adding Taiwan, which it claims as its own territory despite never having ruled it. Australia has no formal diplomatic relations with Taiwan. With big money escaping China and Western investments losing their appetite for the country, one Swiss banking group is swimming against the tide. UBS saying on Tuesday it signed a deal with the Industrial and Commercial Bank of China, aiming to open up collaboration with the Chinese market. The Chinese bank is the world's largest lender by assets, and Swiss UBS has been eager to grow its footprint in China. It already has a joint venture and a private fund business there. But earlier this year, its scaled-back operations amid geopolitical tensions. At the time, it dropped plans to set up a new fund unit in China. UBS also cut a lot of jobs in the region. Now, the Swiss banking group says the two will explore cooperation in investment and corporate banking. Another day of slump for the world's most indebted company. Chinese property giant Evergrande's stock price continued to slide on Tuesday. What effect will the turmoil have on China's unsteady market? Here's more. Evergrande shares tumbled for a second day on Tuesday. They fell as much as 8% in Hong Kong trade, following news of more debt troubles. Its main domestic unit, Hengda Real Estate, said it had failed to make payments due the day before. That came after Evergrande said over the weekend that it was unable to issue new debt. The firm says that's due to an ongoing investigation into Hengda by regulators. Evergrande shares lost more than a fifth of their value on Monday following that news. Now the company says it will negotiate with bondholders to find a solution to the missed payment. But it's all just the latest setback for Evergrande, which has lurched from one crisis to another since its financial woes became public in 2021. The firm has been seeking creditors' approval to restructure offshore debts totalling almost $32 billion. It needs consent from 75% of the holders of each type of debt to approve the plan. The turmoil in the property sector has investors at home and abroad feeling nervous. With real estate accounting for around a quarter of China's economy. That's all for today's China In Focus on YouTube. We're now sharing a shortened version of our program here after being demonetized for two years. Here's what to look out for in our second half. What's at stake in the Indo-Pacific? As President Biden hosts leaders from the Pacific, China's aggression is in the spotlight. How much does America's future hinge on the Pacific region? We hear from retired US Air Force Brigadier General Robert Spalding for a breakdown. The full episode is available on our partner platform, Epic TV. To sign up, click the link down below. Thanks for watching China In Focus. I'm Tiffany Meyer. See you tomorrow.