Companies turn to US courts to challenge restrictions

Chinese companies are increasingly turning to courts in the United States to challenge Washington's restrictions, with battery maker Gotion High-Tech becoming the latest to seek damages after its multibillion-dollar manufacturing project was derailed by local government.

A US subsidiary of Gotion High-Tech has filed an amended lawsuit in federal court in Michigan seeking millions of dollars in damages from Green Charter Township, accusing local officials of breaching a 2023 development agreement for a planned $2.36 billion electric vehicle battery components plant after withdrawing support for the project.

The case adds to a growing list of legal challenges mounted by Chinese companies against US restrictions and policy measures that they argue unfairly target commercially-focused businesses.

The amended complaint alleges the township abandoned commitments to support the project and secure permits, effectively scuttling an investment that Gotion said took years to develop and required millions of dollars in spending on land acquisition, planning and infrastructure.

The company is also seeking compensation for future lost profits and costs associated with Michigan's demand that it repay more than $23.7 million in grants.

The factory, first announced in 2022, was expected to create roughly 2,350 jobs but became the focus of political opposition over Gotion's Chinese ownership. Michigan officials have said the company abandoned the project, an allegation Gotion has denied.

The lawsuit follows a series of legal actions by Chinese firms challenging US government decisions.

Last month, the US Department of Defense expanded its list of companies it alleges have ties to the Chinese military, adding dozens of firms from sectors including EVs, batteries, artificial intelligence, semiconductors, robotics and renewable energy.

Several Chinese firms successfully challenged earlier Pentagon designations after the first version of the military-linked companies list was published in 2021, leading to the removal of some companies from the blacklist. In the latest revision, 10 entities, including subsidiaries of China Communications Construction Co and China National Offshore Oil Corp, were removed.

Zhang Sinan, an independent commentator who has been following the situation, said: "The US can keep extending the list, but the world will not stop needing cheaper clean energy, more efficient EVs, more advanced drug development services or more flexible robotic applications simply because of a list."

chengyu@chinadaily.com.cn