Wind farms or “Trojan horses”? Chinese infrastructure investment in the United States again blocked

A controversial Chinese investment in the United States has made waves recently as Texas lawmakers are working to pass legislation to block a Chinese company from building a wind farm there to prevent China from threatening the security of critical U.S. infrastructure. Analysts say similar incidents will continue unabated for the foreseeable future, signaling that even as the U.S. opens a massive infrastructure that will provide investment opportunities and markets for companies around the world, it will be difficult for Chinese companies to get a piece of the action.

Trojan Horse” near U.S. military bases?

Since 2015, a company called GH America Energy has purchased about 140,000 acres of land in Val Verde County, Texas, with the intention of building a wind farm there. The proposed project, called the Blue Hills Wind Farm, is less than 70 miles from Laughlin Air Force Base, the largest pilot training base in the United States.

“The Blue Hills Wind Farm project has been controversial since it was first announced.

The first alarming point is that GH America Energy is a subsidiary of the Chinese listed company “Guanghui Energy”, which is owned by the “richest man in Xinjiang”, Sun Guangxin. Sun Guangxin. He served in the Chinese army for nearly 10 years and participated in the Sino-Vietnam War. He began doing business after his discharge from the military and has served on the Standing Committee of the Xinjiang Regional Committee of the Chinese People’s Political Consultative Conference, among other positions. Opponents of the Blue Mountain wind project fear that GH U.S. Energy may have ties to the Chinese military and that they may use the wind farm, which is so close to a U.S. Air Force base, to engage in espionage activities.

Texas Senator Donna Campbell is one of the leaders of the opposition to the Blue Mountain Wind Farm project. In a recent interview with the Voice of America, she pointed out that the project proposes to build 700-foot-tall wind turbines, which is 2 or 3 hundred feet higher than normal wind turbines. In addition, the project also plans to build a 10,000-foot runway near the wind farm. What’s even more suspicious is that the site chosen for the wind project is actually a “not very windy place.

“Why?” Senator Campbell repeatedly asked.

She told Voice of America, “When you look deeper into this project, it looks more like a Trojan horse.”

In July 2020, Texas U.S. Senators John Cornyn (R-Texas) and Ted Cruz (R-Texas), along with then-Texas U.S. Representative Will Hurd (R-Texas), sent a joint letter to then-Treasury Secretary Steven Mnuchin (R-Texas), raising concerns about the ” Blue Mountain Wind Farm” project raised similar concerns.

In the letter, the lawmakers said, “Laughlin Air Force Base is our world-class training ground for Air Force pilots, many of whom are future F-35 and B-21 pilots. There is concern that a program with ties to the Chinese Communist Party, so close to the area where these pilots train, could threaten our competitive advantage and national security.”

A security risk for the U.S. power grid?

Another major concern lies in infrastructure security. “When completed, the Blue Hill Wind Farm will be connected to the Texas power grid, one of the three largest in the United States. Once that happens, the Chinese will have access to the technology, data and hardware and software of the critical U.S. grid. Some fear this will give Chinese hackers the opportunity to launch cyber attacks on the U.S. grid.

Military and security experts have pointed out that “cyber warfare” is a major form of future warfare, which includes cyber attacks on the adversary’s power grid, power plants, reservoirs, oil pipelines, public transportation and other critical infrastructure, the consequences of which are no less than a traditional war. Recently, the U.S. Colonial Pipeline Company (Colonial Pipeline) was hit by a cyber attack believed to be a Russian hacker, causing the most important fuel pipeline on the U.S. East Coast to go down and tightening fuel supplies in many places for six consecutive days. In February, Texas suffered a massive power outage due to extreme weather that triggered food and drinking water shortages, killing at least 48 people and causing hundreds of billions of dollars in direct property damage. All of these events have further brought to light the importance of infrastructure security.

Texas Senator Donna Campbell told Voice of America, “Hacking into our infrastructure would be a threat to our national security. There is no evidence yet that this Chinese company intended to do this, but this project would put the U.S. power grid under the influence of a hostile country. By connecting to our infrastructure, they would be able to gather intelligence and learn about our state’s vulnerabilities, and would also threaten other critical infrastructure.”

Senator Campbell further emphasized that her concerns are not limited to companies like GH American Energy, which has ties to the Chinese Communist military. In her view, no Chinese company should be allowed to get involved in critical U.S. infrastructure.

“The Chinese Communist Party has a policy that any company that is Chinese owned is subject to the control of the Chinese Communist Party,” she told Voice of America.

Federal agencies give green light, state lawmakers step in to block

Despite these concerns, the Committee on Foreign Investment in the United States (CFIUS), the federal agency responsible for reviewing the impact of foreign investment on U.S. national security, gave the green light for the Blue Mountain Wind Farm project in 2020. ” project gave the green light. The result of its deliberations was that the Blue Mountain Wind Farm would only have to ensure that its turbines would not interfere with low-altitude flight training at Laughlin Air Force Base.

Faced with this outcome, Texas lawmakers decided to act to stop the project at the state level.

Senator Donna Campbell has introduced the Lone Star Infrastructure Protection Act.) The bill prohibits companies from “hostile nations” such as China, Russia, Iran, and North Korea from participating in Texas critical infrastructure, including not allowing these foreign companies to invest in or participate in the construction of Texas critical infrastructure, acquire local critical infrastructure businesses, or connect their projects to the state’s critical infrastructure, among other things.

Sen. Campbell said she hopes the bill will stop the Blue Hill Wind Farm project.

“This is a matter of our national security,” she told Voice of America.

The bill passed unanimously in the Texas Senate in April and is now being considered in the state House of Representatives.

Chinese companies having a hard time getting a piece of the U.S. infrastructure pie?

“The blockage of the Blue Hill Wind Farm project in Texas is a microcosm of the situation Chinese infrastructure investment in the United States has found itself in in recent years.

There was a time when some analysts thought that U.S. infrastructure development would be a windfall for U.S.-China cooperation, because infrastructure requires a lot of money, which makes investment from China very attractive. And China has accumulated some construction experience and excess capacity from years of infrastructure development, which could be a “win-win” for the U.S. if invested in U.S. infrastructure.

Rick Geddes, director of Cornell University’s infrastructure policy program, explained to the Voice of America that because the U.S. infrastructure is built using an open model of public-private partnerships, foreign companies have the opportunity to participate in all aspects of the project, from financing to design, construction, operation and maintenance.

In 2017, Chinese direct investment in U.S. infrastructure exceeded $10 billion, according to Rhodium Consulting Group. China Construction America was once among the top 50 in the U.S. construction market, and some important U.S. infrastructure, such as the Alexander Hamilton Bridge connecting Manhattan and the Bronx, was built by Chinese companies.

However, Chinese infrastructure investment in the U.S. has fallen off a cliff since 2017 and will be minimal by 2020 due to deteriorating relations between the two countries, the addition of investment barriers in both the U.S. and China, and heightened U.S. concerns about infrastructure security. At the same time, calls for U.S.-China cooperation on infrastructure have become increasingly muted.

Rick Golders, director of Cornell University’s infrastructure policy program, believes such a trend will continue during the Biden administration.

I think the biggest concern is that all kinds of Chinese companies become direct investors in large U.S. infrastructure projects because then they have a lot of control over the infrastructure,” he told Voice of America. And there’s also the issue of cybersecurity right now. If a Chinese investor takes an equity stake in a U.S. infrastructure, they could get access to the computer programs, hardware, software, etc. that operate that infrastructure.”

While U.S. infrastructure projects want to bring in as many bidders as possible when they are put out to bid, that doesn’t mean they have to include Chinese companies, Professor Godes said.

“I don’t think you have to have a Chinese company to create effective competition. If it’s a good project, you’ll have enough big companies bidding on it,” he told Voice of America.

And keeping Chinese companies out of U.S. infrastructure is not a difficult task. State and local governments hold more power over the issue than they do with the federal government.

“If a company wants to participate in a U.S. infrastructure project, it needs to submit a request for qualifications, so it’s easy to cut out a company from a particular country at the qualification stage. The decision of who is eligible to bid and who wins is in the hands of state and local governments, and the federal government cannot require that they have to work with Chinese companies,” Professor Godes emphasized, “There is no lack of policy mechanisms in the U.S. to deal with this issue.”

So the issue is one of precautionary awareness.

Texas Senator Donna Campbell called on other states to take action to secure their own critical infrastructure as well.

She told Voice of America, “This is something that’s happening right under our noses, and no one is looking at the potential vulnerability of our infrastructure. I think other states need to wake up and look at what’s happening in their own states as well.”

At the same time, Senator Campbell also stressed that Texas, which is one of the top states in the U.S. for attracting Chinese investment, remains welcoming to Chinese investment.

“It doesn’t mean that we can’t continue to enjoy good trade with each other,” she told Voice of America, “it’s just about keeping our critical infrastructure safe.”