Sen. Jim Banks is urging Defense Secretary Pete Hegseth to add a Chinese-owned multinational industrial equipment enterprise to its blacklisting of China’s military companies.
Engines produced by Weichai Holding Group are used in rocket systems supplied to the Chinese military. China North Industries Corp., a blacklisted defense manufacturer, uses diesel engines from Weichai in a multilaunch rocket system supplied to the People’s Liberation Army.
In the Indiana Republican’s letter, dated Wednesday, he argued that Weichai’s ownership structure, defense partnerships and state backing meet the criteria for designation as a Chinese military company, known as Section 1260H.
The company is owned by Shandong Heavy Industry Group, a state-owned enterprise controlled by a commission of the Shandong provincial government, fitting the description of a military-civil fusion contributor to China’s defense industrial base, Mr. Banks said.
Weichai also hosts an internal Chinese Communist Party committee that works to align major business choices with national political goals and state policies.
It works directly with foreign defense entities, including signing an agreement with Belarus’ MAZ group to build diesel engines, which was sanctioned by the Treasury Department in 2023.
Weichai also established a joint venture with Kamaz, a truck supplier to the Russian Ministry of Defense, and signed an agreement with Hubei Sanjiang Space Wanshan Special Vehicle Co., a subsidiary of the blacklisted China Aerospace Science and Industry Corp.
Mr. Banks’ letter notes that Chinese President Xi Jinping personally praised Weichai in 2018, calling it a “brilliant result.”
“Collectively, these relationships between Weichai’s members and the CCP demonstrate its connections to the CCP’s industrial policy, government support, and collaboration with institutions that directly advance China’s military-civil fusion strategy and defense industrial base,” Mr. Banks said.
Section 1260H designation increasingly has real teeth, according to legal analysts tracking the list.
A designation would not, by itself, sanction Weichai or bar U.S. companies from doing business with it.
It would bar the Defense Department from awarding contracts to the Chinese company and would make it likelier that the Treasury Department separately blacklists the company, which is the step that would stop Americans from trading shares of its publicly traded subsidiary, Weichai Power.
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