Powering China’s Military with US Tax Dollars

Wanxiang logo, A123 battery / AP

China’s purchase of a United States high-technology battery maker will boost Beijing’s military forces and satellites and threaten the security of U.S. electrical power and communications grids, according former national security officials.

The Obama administration is currently reviewing the sale of the bankrupt U.S. company A123, which received an estimated $250 million in taxpayer funding for research, to China’s Wanxiang Group, a company with ties to China’s government.

The Treasury Department-led Committee on Foreign Investment in the United States (CFIUS) is reviewing the sale and, according to people close to the issue, could rule on whether to approve the Chinese purchase as early as the end of the month.

At issue in the sale is the transfer of an advanced battery technology that uses a process involving lithium iron phosphate (LFP) that produces longer battery life and lighter and more stable batteries that can operate in very low and very high temperature environments.

John Young, undersecretary of defense in the George W. Bush administration, said the potential loss of critical technology to China is worrying.

“A123′s successful development of very low temperature, high power capability batteries may enable a new generation of military and commercial satellites while also providing greater endurance and capability in other military systems,” Young said.


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