Louisiana Gov. John Bel Edwards (D.) pledged a $4.3 million taxpayer-funded grant to Wanhua Chemical. The chemical manufacturing company is partly owned by the Chinese government, and several associates on Wanhua Chemical’s board are members of the Chinese Communist Party.
Wanhua Chemical has agreed to invest $1.1 billion to build a facility in Louisiana in exchange for the grant and several tax-breaks, Edwards announced on Monday. The tax-breaks also include an exemption from property tax on the facility for 10 years.
The chemical manufacturer will also benefit from Louisiana’s Quality Jobs Rebate program, which will give a 6 percent cash rebate on up to 80 percent of Wanhua’s payroll for new jobs over the next ten years. From 2018, Wanhua Chemical’s entire Louisiana payroll will be eligible for the rebate.
Edwards called the deal “a testament to the strength of Louisiana’s business climate and unmatched transportation logistics,” bringing 170 high-paid jobs to the state.
However, the deal with Wanhua will send Louisiana tax dollars to the Chinese government and several members of the Chinese Communist Party. Wanhua Industry Group owns around 48 percent of Wanhua Chemical and is itself almost 40 percent owned by a Chinese state-backed organization, the Yantai State-owned Assets Supervision and Administration Commission (SASAC).
Spokesman for the governor, Richard Carbo, denied claims that the Chinese Communist Party would be receiving tax dollars, saying that the grant is tied to private investors and not any government or political entity. However, it is well known that members of the Chinese Communist Party are on Wanhua Chemical’s board.
Carbo also said that Wanhua Chemical will only be eligible for the grant if it completes the project and employs the said number of people.
“If they don’t meet those obligations, they don’t receive the performance-based grants,” Carbo said. “If they do meet those obligations, the state of Louisiana and its people will be the beneficiaries of billions of dollars of new economic output in our state, as well as the additional infrastructure improvements.”
The deal with Wanhua Chemical is the second largest Chinese investment in Louisiana’s chemical manufacturing sector. Yuhuang Chemical, another Chinese company, is already constructing a $1.85 billion facility in the state.