California Governor Gavin Newsom recently committed his state to a $990 million contract with BYD (Build Your Dreams), a Chinese Communist Party-linked electric car company, in exchange for 200 million protective masks.
The governor’s advisors have disclosed few details about the agreement, but, according to reports, the state of California has already wired BYD the first $495 million installment.
Newsom’s aggressive move received bipartisan backlash from his within his own state legislature and party.
Two days after the announcement of the deal, Assemblyman Phil Tin (D-San Francisco), Chairman of the Assembly Budget Committee, said: “We would never approve a budget this way. The whole reason we don’t do a budget one request at a time is we want to know the big picture.”
The big picture raises more questions than answers.
Founded in 1995 and headquartered in Shenzhen, China, BYD manufactures electric cars, busses, forklifts, solar panels, and rechargeable batteries.
BYD’s founder, Wang Chuanfu, is a member of the Chinese Communist Party (CCP) and has served the party in numerous official capacities – most recently as member of the Fifth Shenzhen Municipal People’s Congress Standing Committee.
BYD assists China’s “Made in China 2025” plan and has pocketed billions in CCP electric-vehicle government subsidies. In March 2019, BYD signed an agreement with Huawei Technologies to promote comprehensive strategic cooperation.
The United States decided to blacklist Huawei, a state-affiliated Chinese telecommunications giant, last year over national security concerns. According to United States Secretary of State, Mike Pompeo, Huawei poses “massive security and privacy risks.”
Despite the Huawei-BYD association, Frank Girardot, spokesman for BYD promises: “There’s no spyware in BYD buses. There’s nobody in the Chinese government that [sic] tells us what to do.”
Still, members of Congress caution against spending federal dollars on Chinese state-owned or subsidized companies.
Representative Harley Rouda (D-CA) said: “It’s in the national interest to make sure we have viable rail and bus industries and to protect us from spying and sabotage of our public transportation system.”
BYD presence in California began in 2008, when company associates approached Southern California officials with plans to build electric vehicles. Later, in 2013, then Governor Jerry Brown gave BYD the green light and announced plans to manufacture electric buses for the greater Southern California area.
During a tour of BYD’s Shenzhen facility, Brown said, “I think it’s very important that we start replacing the bus fleet with electric buses.” Since 2014, BYD has spent more than $1 million lobbying California state officials and, from 2008 to 2017, received more than $330 million in grants, subsidies, and public contracts.
Providing state contracts for Chinese government-owned companies like BYD to set up shop in the United States hurts American industry and exposes our infrastructure to an untrustworthy totalitarian regime. Experts estimate the US electric-bus market will jump from $745 million in 2018 to about $1.95 billion in 2024. State governments should halt their funding of CCP affiliated entities and instead enlist US corporations to meet this growing demand.