Chinese Military-Linked Companies Despite Forced Labor and National Security Warnings

 WASHINGTON – A powerful bipartisan congressional committee released an explosive investigative report Thursday that found America’s largest financial institutions helped companies tied to the Chinese Communist Party’s military apparatus and forced labor system raise billions in global capital markets — proceeding with the deals even after federal warnings, incomplete due diligence responses, and internal identification of significant national security risks.

Ottawa cleared a multibillion-dollar acquisition by a Chinese mining conglomerate the same month Washington was subpoenaing Wall Street banks for financing it.

The committee’s core finding is, by its own account, simple: the United States government formally designated a foreign company as linked to China’s military, and months later, several of America’s largest banks helped that company raise billions on the Hong Kong Stock Exchange anyway.

“Each bank made the choice to disregard the U.S. government’s Chinese military company designation in order to make millions of dollars,” the report states. “If doing the deal once was not troubling enough, JPMorgan Chase, Bank of America, and Morgan Stanley are also doing a second offering for the same Chinese military company to raise billions more.”

The report frames the broader stakes in terms that cut to the heart of the post-Cold War financial order.

“In a world shaped by geopolitical rivalry, those same markets can also become witting, or unwitting, conduits for strategic risk — linking American capital to the ambitions of foreign adversaries,” it states. “The question is no longer whether finance and national security intersect, but whether existing guardrails are sufficient to prevent U.S. institutions from enabling activities that undermine American national security interests.”

In a finding with direct implications for Canada, the report also flagged Wall Street’s role in underwriting Zijin Mining Group — a company whose Canadian subsidiary has made major acquisitions in Toronto-listed miners after Ottawa quietly approved a national security review of the deals, even as Washington was moving to cut the conglomerate off from American capital markets.

The House Select Committee on China concluded that JPMorgan Chase and Bank of America underwrote the Hong Kong initial public offering of Contemporary Amperex Technology Co., Ltd. (CATL), the world’s largest electric vehicle battery manufacturer, months after the Department of Defense placed the company on its list of designated Chinese military companies in January 2025. The offering raised approximately $5.2 billion in May — the largest listing of the year.

The report alleges JPMorgan and Bank of America accepted CATL’s own assertions that it had no links to China’s military, despite the Pentagon’s contrary conclusions and what the committee described as incomplete responses during due diligence reviews. CATL allegedly provided identical responses to multiple JPMorgan questions concerning ties to the People’s Liberation Army, dual-use technologies, and military-linked entities.

The committee’s investigation found that CATL maintained deep institutional ties to the Chinese defense-industrial base, including partnerships and business relationships with blacklisted entities — among them Huawei, China North Industries Group, China Electronics Technology Group Corp., China State Shipbuilding Corporation, Commercial Aircraft Corporation of China, China Mobile, and China National Nuclear Corporation.

The report also details CATL’s ownership stake in Wuhu Shipyard, a key builder of Chinese naval vessels and military equipment, as well as research partnerships tied to the People’s Liberation Army’s National University of Defense Technology and China’s nuclear weapons complex. The committee separately cited CATL’s role in modernizing China’s submarine fleet with advanced lithium-ion batteries — a finding that former Senator and current Secretary of State Marco Rubio and 26 bipartisan members of Congress had previously raised as a direct threat to American naval security.

On the question of forced labor, the committee cited CATL’s close tier-one supplier relationship with the Xinjiang Production and Construction Corps, a sanctioned paramilitary entity linked to the operation of forced labor camps and the detention and abuse of Uyghur Muslims — the same paramilitary organization that sits at the center of the Uyghur Forced Labor Prevention Act. According to the investigation, CATL refused to provide full supply chain audits, while the banks proceeded with the deals regardless, despite both public evidence and internal diligence reports identifying ongoing forced labor exposure.

The Morgan Stanley findings are equally damaging.

In September 2025, Morgan Stanley assisted with the initial public offering of Zijin Gold International — a subsidiary of Zijin Mining Group, which had been added to the Uyghur Forced Labor Prevention Act Entity List in January 2025. The committee found that Morgan Stanley’s involvement raised direct questions of whether it helped Zijin Mining evade American prohibitions by stripping out its non-Chinese gold mining assets and listing them on the Hong Kong Stock Exchange. Internal documents showed the firm had identified significant sanctions and national security risks before proceeding. Morgan Stanley declined to comment.

The Select Committee’s allegations and findings come in the wake of Zijin Mining’s aggressive expansion into Canada — an expansion that Ottawa has actively facilitated even as Washington works to shut the company out of American capital markets. In January 2026, Zijin Gold International agreed to acquire Toronto-based Allied Gold for approximately C$5.5 billion, adding major open-pit gold mining operations across Africa to its portfolio. The deal cleared a Canadian national security review in April 2026. The acquisition follows Zijin’s earlier purchase of Toronto-based Continental Gold and its large-scale Buriticá gold project in Colombia. Through its Canadian subsidiary, Zijin Mining Canada, the company has continued to use Canadian corporate vehicles as acquisition platforms across the Americas and Africa.

That divergence carries new weight in the context of rapidly deteriorating security relations between Ottawa and Washington.

On Monday, Under Secretary of Defense Elbridge Colby announced the Pentagon is pausing participation in the Permanent Joint Board on Defence, an advisory body on North American continental defense established in 1940 — the first time any American administration has suspended participation in the board in its more than eight decades of existence. Colby accused Canada of failing “to make credible progress on its defense commitments,” saying: “We can no longer avoid the gaps between rhetoric and reality.” Prime Minister Mark Carney had declared in April that “the days of our military sending 70 cents of every dollar to the United States are over” — a statement the Trump administration interpreted as a direct provocation.

The implications of Thursday’s report reach further still.

The committee concluded that existing American law is insufficient to stop financial institutions from financing companies tied to China’s military-industrial base, because Section 1260H restrictions primarily affect Defense Department procurement rather than broader commercial activity. “The deals were legal, so the banks proceeded,” the report states. The committee is now calling for legislative reforms that would require American financial institutions to treat Pentagon military-company designations as binding constraints on capital markets activity — closing a legal gap that, as the CATL and Zijin Gold transactions make plain, the largest banks on Wall Street have been willing to exploit.

A prior House Select Committee investigation had already found that Wall Street firms channeled roughly $6.5 billion into 63 Chinese companies appearing on American government blacklists through index providers and asset managers, with the MSCI index complex alone funneling approximately $3.7 billion into those same firms. Thursday’s report makes clear that voluntary compliance and reputational pressure have not been sufficient deterrents. JPMorgan pursued the CATL deal aggressively — reportedly deprioritizing other transactions to secure the listing — despite a low fee structure that raised its own questions about what the bank was purchasing beyond the immediate transaction. Morgan Stanley identified significant sanctions and national security risks internally and proceeded regardless.

“My committee’s investigation calls for serious policy changes to ensure what JPMorgan and Bank of America did never happens again,” Chairman Moolenaar said.

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