A former CIA officer warned during a House hearing Wednesday that the Chinese Communist Party (CCP) could use U.S. subsidiaries of Chinese firms to steal intellectual property and conduct economic espionage.
The hypothetical company in question might provide “tips and leads” to Chinese state security given its Chinese government ties, Peter Mattis, ex-CIA officer and current president of The Jamestown Foundation, told Kansas Republican Rep. Jake LaTurner during Wednesday’s Committee on Oversight and Accountability hearing. Mattis’ comments were in the context of a discussion about Cnano USA, a subsidiary of China-based Cnano Jiangsu Technology Co., Ltd. (Cnano Jiangsu) that plans to build a liquid conductive paste plant outside Kansas City, approximately 70 miles from Whiteman Air Force Base, the DCNF recently reported based on research conducted by The Heritage Foundation Oversight Project and Heritage Action.
The DCNF not only found that Cnano Jiangsu has extensive CCP and Chinese military ties, but also discovered that the firm’s CEO, who also serves as Cnano USA’s director, has repeatedly interacted with a CCP agency called the United Front Work Department (UFWD), which conducts influence and intelligence operations, according to the Houses Select Committee on the CCP.
“Could you explain how the United Front might use a U.S. subsidiary of a Chinese entity to conduct non-kinetic warfare tactics, such as economic warfare?” LaTurner asked Mattis during Wednesday’s hearing while discussing Cnano USA.
“There could very well be in the Chinese parent company a Party committee that has a United Front Work Department attached to it and works through that company. It would largely be involved in mobilizing the employees of that company and channeling their efforts to support the Party’s apparatus,” Mattis replied. “The most likely way that it would be involved in any form of intellectual property theft and economic espionage would be in providing tips and leads to essentially the Ministry of State Security or local state security department of Jiangsu province.”
In February 2024, LaTurner and seven other Republican lawmakers led by Missouri Rep. Mark Alford, sent a letter to the Department of Defense and Treasury Department calling on the Committee on Foreign Investment in the United States (CFIUS) to investigate Cnano USA’s intended chemical plant, following a DCNF investigation finding Cnano Jiangsu employed dozens of CCP members and was paid for its participation in a Chinese military initiative known as the 863 Program.
During Wednesday’s hearing on “Defending America From The Chinese Communist Party’s Political Warfare,” LaTurner also asked Mattis about Cnano Jiangsu’s involvement in the 863 Program.
“Cnano Jiangsu has repeatedly received funding from the CCP for participation in state initiatives, including in the CCP’s 863 Program,” LaTurner said. “Can you explain what the CCP’s 863 Program was, and the purpose of it and other similar programs?”
“The 863 Program is named after the date that it was launched, which is March 1986, and it is essentially a state investment vehicle to channel funding for national defense modernization and civilian technologies that would facilitate that,” Mattis replied. “And although they’ve changed the name — I think at least twice over the years and come up with related programs — it still retains that focus on military modernization.”
Cnano USA’s president, Shawn Montgomery, acknowledged that Cnano Jiangsu had participated in the 863 Program and had removed references to the program from its website when questioned by state Rep. Kristey Williams during a March 2024 Kansas House hearing.
“The 863 reference that was on there, I don’t know why it was taken down to be completely honest,” Montgomery testified. “Furthermore, I don’t even know why it was there to begin with.”
While an archived version of Cnano Jiangsu’s website states the Chinese firm had previously “undertaken a number of national 863” projects, references to the program were removed less than a week after the DCNF’s December 2023 report was published.
“So, here we have a company that’s received money from the 863 Program and has engaged with the United Front in the past. Should we believe that a U.S. subsidiary of a PRC company is completely divorced from its PRC-based umbrella?” LaTurner asked Mattis during Wednesday’s hearing.
“I’m not sure of any company that I know has been very closely tied to the Party-state and its objectives that you can separate off and I’m not sure that many of the U.S. employees really understand what that relationship is,” Mattis replied.
The CCP is “hellbent on infiltrating and influencing every aspect of our economy, society, and government,” LaTurner told the DCNF.
“The Oversight Committee’s investigation into the CCP is vital to ensuring the federal government is using every tool in the toolbox to protect Americans from President Xi’s ongoing political and economic warfare.”
Cnano USA and Cnano Jiangsu did not respond immediately to the DCNF’s request for comment.
