Chinese-Owned Chemical Giant Expanding Into US Heartland Led by Members of Communist Party, Influence Orgs

by Philip Lenczycki

Top executives behind a Chinese chemical manufacturer planning to build two U.S. factories belong to the Chinese Communist Party (CCP) and affiliated influence outfits, a Daily Caller News Foundation investigation has found.

Capchem Technology USA, the wholly-owned subsidiary of China-based Shenzhen Capchem Technology (Capchem), is slated to build a $120 million factory in Ohio and a $350 million plant in Louisiana. At the same time, Capchem records and social media posts that the DCNF translated show the company employs dozens of CCP members. Executives at Capchem and Capchem USA have also held positions at organizations affiliated with CCP influence operations, a DCNF review of Capchem’s website, Chinese social media account and executives’ social groups found.

The DCNF’s investigation is based, in part, on information provided by the Heritage Foundation and Heritage Action. The DCNF previously reported that Capchem, which makes chemicals used for batteries in electric vehicles, has received tens of millions of dollars in subsidies from Chinese government agencies, including a blacklisted Chinese government entity that plays an instrumental role in the CCP’s “Military-Civil Fusion” efforts.

“Communist Chinese companies have no place on American soil,” New York Republican Rep. Elise Stefanik, chair of the House Republican Conference, told the DCNF. “The Communist Chinese-owned company has a concerning history of advancing CCP military technology, presenting a clear and pressing national security threat.”

A Capchem spokesperson acknowledged that “some” of its employees are CCP members, but that “the company doesn’t have exact statistics about the number of them.”

However, a DCNF review of Capchem’s Chinese social media account found that the firm reported employing 44 CCP members as of June 2020. A separate social media post from 2023 identifies Capchem President Zhou Dawen as (pictured above, left) Party Secretary of the company’s CCP branch.

A “Party branch” is the smallest “grass-roots” CCP organization, and is required in Chinese institutions containing three or more Party members, according to the Supreme People’s Procuratorate, which is China’s state organ for legal supervision.

“As a privately controlled company, Party member identity does not influence company management or operations,” the spokesperson told the DCNF.

Yet, the CCP Central Committee’s Organization Department says party committees are meant to “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.”

In July 2019, Capchem’s own social media account shows the CCP Committee in the Pingshan District of Shenzhen recognized Zhou as an “Outstanding Party Secretary” during an event celebrating the CCP’s 98th anniversary.

“This honor doesn’t belong to me personally, it belongs to all of Capchem’s Party branch comrades,” Zhou said during the 2019 event, according to the post. “As an old CCP member, I have a responsibility and duty to do my best for the Party’s cause.”

“My experience tells me, as long as we work according to the instructions assigned by our superior Party unit, work conscientiously, obey the law and what may come, the enterprise will most certainly overcome obstacles and usher in a better future,” Zhou said.

Capchem’s spokesperson admitted Zhou is “a member, but he is at retirement age,” adding that Capchem USA “does not employ any member of the Chinese Communist Party.”

But Capchem USA executives have been affiliated with groups identified by U.S. government entities as serving CCP’s “United Front” strategy. “United Front” groups engage in “influence activities and intelligence operations,” according to the House Select Committee on the CCP.

The “United Front” system is led by the United Front Work Department (UFWD), a “Chinese intelligence service” responsible for coordinating domestic and foreign “influence operations,” according to the U.S. government-funded U.S.-China Economic and Security Review Commission.

Capchem Chairman Qin Jiusan (pictured above, right) is identified in a Louisiana business filing as a director of Capchem USA.

Qin’s company bio previously disclosed his membership in the Pingshan branch of the Chinese People’s Political Consultative Conference (CPPCC). The U.S.-China Economic and Security Review Commission identified the CPPCC as one of several “important actors within the United Front system” in a 2023 report.

The CPPCC’s English-language charter states that delegates must “uphold the leadership” of the CCP, “take advantage of the CPPCC as a United Front organization,” and “keep state secrets.”

Qin is also a member of the Pingshan branch of the All-China Federation Of Industry And Commerce (ACFIC), according to the Shenzhen municipal government and CPPCC websites.

The UFWD lists ACFIC as a “subordinate,” and ACFIC describes itself as CCP “led” and tasked with linking the CCP “with people in non-public economic activities.”

A Capchem spokesperson confirmed Qin is a “local member” of the CPPCC and ACFIC. Capchem itself is also a corporate member of ACFIC, the spokesperson added.

However, Qin’s CPPCC affiliation disappeared from his company profile after the DCNF reached out for comment.

Capchem previously scrubbed references to its products being used in “high-end military equipment” and within the “military and aerospace industries” from its website after being contacted for comment by the DCNF.

“When these companies start scrubbing their websites, it’s clear that we’re on the right track,” Mike Howell, director of The Heritage Foundation’s Oversight Project, told the DCNF.

‘Follow Closely In The Party’s Steps’

In May 2023, Capchem announced that a “top advisor” to ACFIC’s Shenzhen branch, who was also a former China Ministry of Aerospace official, inspected the firm’s headquarters and met with company chairman Qin Jiusan.

The Shenzhen UFWD’s social media account also contains posts indicating that United Front officials have inspected Capchem facilities several times, including in February 2020 and April 2022. Photos from the 2020 and 2022 inspections show Qin leading UFWD minister Li Guangming on a tour of Capchem’s headquarters.

In August 2022, Qin spoke at a UFWD event in Shenzhen, according to the Shenzhen UFWD’s social media account. In his remarks, Qin described a speech given roughly two weeks earlier by President Xi Jinping as “profound,” telling the audience it “clarified a series of major theoretical and practical questions concerning United Front work in a new era.”

“As the vice chairman of Pingshan District’s ACFIC, I will take the lead in strengthening my personal study [of Xi’s teachings],” Qin said, adding that he would also “follow closely in the party’s steps.”

“Exacerbating our reliance on companies like Capchem for the domestic manufacture of energy products would be a self-defeating mistake,” Bryan Burack, senior policy advisor for China and the Indo-Pacific at the Heritage Foundation’s Asian Studies Center, told the DCNF.

Capchem USA CEO Charlie Yao also previously belonged to an organization that the Chinese government has identified as serving the United Front, a Capchem spokesperson said.

Yao “was a member of the All-China Youth Federation from 1995-2000,” the spokesperson told the DCNF.

The All-China Youth Federation (ACYF) is a “patriotic United Front organization” that operates “under the leadership” of the CCP, according to the Chinese government.

John Dotson, deputy director of Global Taiwan Institute, called ACYF a “CCP-operated agency” and “United Front” organization.

“Any of ACYF’s officials would be subject to Party orders, Party discipline, etc.,” Dotson told the DCNF.

Capchem’s spokesperson, however, claimed that “neither Shenzhen Capchem nor Capchem USA has a relationship with individuals or entities involved in the CCP’s United Front.”

Burack told the DCNF that, given all Capchem’s CCP and United Front ties, he views the company as “part of the CCP’s influence apparatus.”

‘No Such Thing As A Private Company In China’

Capchem USA currently has plans to build chemical manufacturing facilities for electric vehicles in Lawrence County, Ohio and Ascension Parish, Louisiana.

Capchem USA also stands to benefit from U.S. government largess. Ohio’s Lawrence County recently granted Capchem USA a 50 percent tax break and Louisiana offered the firm a “$2 million performance-based grant for infrastructure expenses,” among other state incentives. Likewise, Capchem could also benefit from the web of subsidies in the Inflation Reduction Act, which President Joe Biden signed into law in 2022.

The company’s plans, however, have come under scrutiny from lawmakers who believe the firm’s Chinese government ties present a national security threat.

“Examples like Capchem are all the more reason we need to ensure Chinese companies are not eligible to receive U.S. taxpayer funding to further entrench our reliance on CCP-dominated supply chains in strategic industries,” Wisconsin Republican Rep. Mike Gallagher, chairman of the House Select Committee on the CCP, told the DCNF. “There is no such thing as a private company in China.”

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Philip Lenczyck is a reporter at Daily Caller News Foundation.
Photo “Zhou Dawen” by CAPCHEM, USA; Photo “Qin Jiusan” by CAPCHEM, USA.