This Chinese Company Imports Workers And Is Accused Of Polluting Hungary’s Water. It Also Gets Tax Breaks In US.

In idyllic Sidney, Ohio, roughly two miles southwest of the 166-year-old fairgrounds, just past the Louis Sullivan-designed bank and ornate Court Square, lies the newest location of SEMCORP Manufacturing USA Inc., a Chinese battery component manufacturer that prefers its new hires speak Mandarin.

Photos and other investigative materials reviewed by the Daily Caller News Foundation show Chinese nationals being transported between temporary housing in motels and the Sidney plant at unusual hours, resembling the “996” (9 a.m. to 9 p.m., 6 days a week) practice in China. The materials include job posts on Indeed.com listing the company’s preferred language as Mandarin.

It’s a far cry from the promise of 1,199 full-time positions for locals that charmed the Sidney City Council in May 2022. The council voted unanimously to approve a job creation tax credit for SEMCORP after the company predicted it would produce $73 million in annual payrolls, a boon to the small Midwestern town.

SEMCORP enjoys a 75% property tax exemption from the city of Sidney for 15 years through a Community Reinvestment Area (CRA) agreement, as independent reporter Breanna Morello first reported.

“We are encouraged by their willingness to be a good neighbor,” said Sidney City Manager Andrew Bowsher after the vote.

SEMCORP is just one example of how the American government invests in Chinese firms that do not invest in the safety and security of the Americans living in the towns they operate in.

The One Big Beautiful Bill Act (OBBBA) — the massive spending and tax credit bill President Donald Trump signed into law in July 2025 — was supposed to prevent tax credits from flowing to companies owned or effectively controlled by China, or to companies that receive most of their supplies from China.

Taxpayer funding funneled to Chinese battery manufacturers risks supporting dual use technology, according to Michael Busler, a policy analyst and a professor of finance at Stockton University. Advanced batteries play a role in military equipment.

“It is critically important that the U.S. does not rely on China for these products,” he told the DCNF.

But enforcement is a challenge. Beijing embraces a fusion of the civil and military uses of science that blurs the line between work on consumer products and work on weapons, according to the State Department. Chinese controlled firms gobble up subsidies through U.S. shell companies, according to Consumer Action for a Strong Economy, a political advocacy group focused on consumer interests and the free market.

In the end, American tax dollars may subsidize Chinese industrial policy. Often promised jobs for locals never materialize.

SEMCORP confirmed that Chinese nationals work at the company. James Shih, the head of global projects and legal for SEMCORP Group, told the DCNF in an interview that these workers have L-1 visas, which are meant for executives and technicians with specialized knowledge. He challenged the assumption that there is anything unusual about employees staying in motels and the company providing travel to employees without driver’s licenses.

Shih said the company plans to partner with an American firm in order to comply with regulations on Chinese firms. He insisted the firm would eventually train up Americans, but could not provide a timeline for doing so.

He said that the company does not plan on utilizing city tax breaks based on hiring or investment numbers.

“SEMCORP America is proud to be the first company to invest in the commercial-scale manufacturing of coated lithium-ion battery separator, a critical component of our energy supply chain, in the United States,” Shih said in a statement. “We’re also proud of our international employees working shoulder-to-shoulder with our local workforce.”

“We’re still early in our launch but look forward to bringing hundreds of advanced manufacturing jobs right here to Ohio,” he added.

Within weeks of Ohio Gov. Mike DeWine announcing SEMCORP’s plans to build a plant in Sidney as part of $1 billion in investment across the state, residents packed into City Hall to raise concerns about the company’s generous tax credits and Chinese roots, according to a Sidney Daily News report.

Twenty-year resident J.R. Edwards said he was worried about runoff into his nearby property, the paper reported. SEMCORP manufactures insulation separating the nodes of electric car batteries, a process that involves several hazardous solvents.

Now new concerns have emerged at an older plant in Europe — the company’s first factory outside of China.

SEMCORP’s first foreign factory opened in 2023 in Debrecen, Hungary. Just three years later, it has been alleged that the plant leached aluminum into the groundwater at 13,000 times the legal limit, according to a June report by Index, Hungary’s most popular news site, translated by the DCNF.

The Hungary plant has been under regular environmental inspection since foam from a faulty fire alarm system seeped into the groundwater in 2024.

Hungary’s environmental authority discovered a pungent-smelling substance in February, but the company delayed sending in tests of metal pollution in the groundwater until May 14, according to Index. The regional government pulled the plant’s production license in late June, halting operations, per Reuters.

Shih said that many of the contaminants identified in the groundwater in Hungary are not used in their manufacturing process. SEMCORP is located in an industrial park with other EV battery manufacturers. Aluminum, the primary cause for concern, is used in SEMCORP’s process however.

Former Hungarian Prime Minister Viktor Orbán welcomed resource-intensive, Chinese owned “giga” plants with government tax breaks and legal loopholes — which was seen by many Hungarian voters as a betrayal of his anti-immigration roots. The unpopularity of the EV battery sector and its government giveaways may have played a role in Orban’s shock electoral defeat in April.

Hungarian Prime Minister Péter Magyar announced in June that he was cracking down on non-European Union visas, and European media has noted that most are granted to workers in the battery and automotive industries.

Today, even members of Orban’s Fidesz Party have changed their tune.

Debrecen Mayor Papp László, a member of Fidesz, urged a complete investigation, including criminal penalties if necessary.

“We strongly urge the environmental protection authority to conduct a comprehensive investigation into this matter. It should examine SEMCORP’s liability, suspend SEMCORP’s manufacturing activities if necessary, and consider revoking its environmental permit,” László said in a video posted to Facebook, translated by the DCNF.

The Debrecen water utility has said the groundwater contamination has not impacted the city’s drinking water, according to The Debrecen Sun.

Back in Sidney, SEMCORP was slated to receive state tax credits for 15 years in exchange for the 1,199 new jobs, then two years later reduced the number of promised jobs down to 300, the Ohio Department of Development told the DCNF in a statement. But even that number may have been an overpromise. SEMCORP never executed its end of the deal, so the Ohio Tax Credit Authority voted on June 1 to cancel the agreement entirely, the development department said.

SEMCORP’s international chief executive at the time of the project’s announcement was Jeff Liu, formerly the CEO of Fuyao Glass, a car window manufacturer in nearby Moraine, Ohio. Liu did not respond to a request for comment.

Like SEMCORP, Fuyao Glass was welcomed to Ohio for its promise of thousands of manufacturing jobs and received millions in government investment, only for those jobs to dissipate, according to a June congressional letter.

Federal agents raided the Moraine, Ohio, Fuyao plant in 2024 investigating allegations of human trafficking and money laundering, uncovering evidence that the company used a network of shell companies that recruited Chinese and Mexican illegal aliens and treated them like serfs, housing them in hotels and transporting them to and from work, according to the Department of Justice. The investigation remains ongoing, according to the Dayton Daily News. There have been no criminal charges, two years after the raid, according to local reports.

Shih said that Liu left the company in 2023 before operations at SEMCORP got underway.

Speaking Mandarin ‘A Plus’ In North Carolina Too

SEMCORP is far from the only factory of its kind receiving these kinds of tax breaks.

A press release from the state of North Carolina describes Green New Energy Materials, Inc. (GNEM) as based in Delaware and having been founded in 2023. GNEM is a subsidiary of Shenzhen Senior Technology Material Co. Ltd or “Senior-China,” according to the Carolina Leader. The state government did not mention its China parent company in the press release.

The Shenzhen-based company has direct ties to the Chinese government, according to DCNF translations of Chinese media coverage and the company’s public filings.

Senior-China has been chaired by Chen Xiufeng since 2003, according to Baidu, a Chinese search engine.

GNEM will receive $3.6 million via a “Job Development Investment Grant (JDIG)” over 12 years from the state for its Denver, North Carolina, plant.

When seeking to secure one of those North Carolina jobs, subsidized by American taxpayers, speaking Mandarin “is a plus,” according to one archived job listing.

Chen Xiufeng has direct involvement with the Chinese government, having served as a delegate to the Fifth Shenzhen People’s Congress, according to a DCNF translation of a Chinese website.

He serves as a senior “chemical and materials” committee member within the All-China Federation of Industry and Commerce, an organ of the Chinese Communist Party that serves as a liaison to private industry, a DCNF translation of another Chinese website shows.

“I navigate life with two books, one is the Tao Te Ching, one is the Selected Works of Mao Zedong,” Chen said in a 2022 interview translated by the DCNF.

The company also has ties to the China Academy of Engineering Physics (CAEP), China’s nuclear-weapons research and development unit. The company’s 2016 IPO prospectus disclosed that a former senior executive had received a “military-to-civilian” award from the CAEP, the DCNF confirmed in its translation.

GNEM did not respond to a request for comment.

Companies headquartered in China — flagged by the U.S. Trade Representative (USTR) for chronic and pervasive patent violations — often do not follow U.S. intellectual property law, even when receiving American tax breaks.

When Senior-China was sued by competitor Celgard in September 2019 for allegedly violating its patent, the company argued that it was “a Chinese corporation that does not purposefully direct any activity at California.”

An employee of Celgard from 2005 until 2016 resigned from the company before quickly joining Senior-China as its chief technology officer, Celgard’s legal complaint alleges.

Celgard — which operates under a Japanese parent company — alleged that “Senior hired Dr. Zhang for the specific purpose of using his knowledge of Celgard’s patented technology,” in particular a design for reducing the impact of a corrosive byproduct called dendrites.

The companies settled in a November 2023 confidential agreement. Senior-China created its U.S.-incorporated subsidiary, GNEM, that same year.

By 2024, GNEM began receiving American tax breaks, according state records, with the Department of Commerce stating that GNEM represented “the company’s [Shenzhen Senior] expansion of its first manufacturing operation in the United States.”