US Banks Helped Chinese Military Firm Raise Billions

A congressional investigation has found that major U.S. banks — JPMorgan Chase, Bank of America, and Morgan Stanley — helped Chinese battery giant CATL raise billions of dollars through a Hong Kong stock offering despite the Pentagon having designated the company as a “Chinese military company” under federal law. While the banks broke no U.S. law, the House Select Committee on the Chinese Communist Party argues they “disregarded” the government’s military designation to collect millions in fees, raising serious national security concerns about the financial sector’s role in enabling potential adversaries.

The Investigation

The House Select Committee on the CCP released its findings on May 21, 2026, following a year-long investigation into Wall Street’s involvement with CATL (Contemporary Amperex Technology Co.), the world’s largest electric vehicle battery manufacturer. According to Fox News, which first reported on the report, the committee alleges that JPMorgan Chase and Bank of America underwrote CATL’s Hong Kong IPO — helping the company raise approximately $4.5 billion from global investors — after the Pentagon designated CATL under its Section 1260H list of Chinese military-linked firms in January 2025.

“To be clear, the banks broke no U.S. law and the transactions were not prohibited by U.S. law,” the committee’s report states. “But each bank made the choice to essentially disregard the U.S. government’s Chinese military company designation to make millions of dollars.”

CATL’s Pentagon Designation

On January 7, 2025, the U.S. Department of Defense added CATL to its Section 1260H list, which identifies companies the War Department determines are linked to China’s military or military-civil fusion strategy. In a statement, CATL denied the allegations, saying: “CATL has never engaged in any military-related business or activities, so this designation by the Department of Defense is a mistake.” The company said it would pursue legal action if necessary.

The Section 1260H designation primarily restricts U.S. government agencies from contracting with listed entities but does not broadly prohibit private-sector commercial activity or investment — a gap the committee argues allows Wall Street firms to profit from activities that undermine U.S. national security objectives.

The IPO and Bank Involvement

CATL raised approximately $4.5 billion in its Hong Kong IPO, making it the world’s largest stock offering in 2025. The stock debuted on May 20, 2025, surging over 16% on its first trading day, as reported by Energy Storage News. JPMorgan Chase and Bank of America served as underwriters, with Morgan Stanley also participating in a subsequent offering.

The House Select Committee had sent letters to the banks in April 2025 demanding they withdraw from the deal. Chairman John Moolenaar (R-MI) wrote at the time: “If JPMorgan and Bank of America proceed with this IPO, they risk complicity in underwriting genocide, undermining American industry, and endangering U.S. service members.”

Banks Defend Their Actions

Both JPMorgan Chase and Bank of America defended their involvement, arguing that CATL is not sanctioned by the U.S. government and remains deeply integrated into Western manufacturing supply chains.

“Based on available information and our own due diligence, CATL has lawfully partnered with American companies — including major auto manufacturers — to provide essential battery technology that will strengthen U.S. manufacturing and enhance American competitiveness,” a JPMorgan spokesperson told Fox News Digital.

A Bank of America spokesperson said: “We complied with the law and U.S. government sanctions policies. We conducted the appropriate due diligence on this transaction, and we shared significant detail about our process with the committee.”

JPMorgan CEO Jamie Dimon previously defended the bank’s work in a May 2025 Bloomberg Television interview, stating: “If we thought it was wrong, we wouldn’t do it. The government did not sanction CATL.”

National Security Concerns

The committee’s concerns extend beyond the IPO itself. CATL controls approximately 37% of the global EV battery market and supplies batteries to Tesla, Ford, BMW, Mercedes-Benz, Volkswagen, and Stellantis. The committee cited publicly available evidence linking CATL to Chinese military-industrial entities, including research collaborations with defense-linked institutions and potential ties to the Xinjiang Production and Construction Corps, a sanctioned paramilitary entity.

According to Wikipedia, CATL is the world’s dominant EV battery manufacturer with revenue reaching $61.2 billion in 2025 and approximately 132,000 employees worldwide. The company operates 15 battery manufacturing plants globally, including facilities in Germany, Hungary, Indonesia, and Spain.

The Policy Gap and What Comes Next

The case highlights a significant gap in U.S. policy: the Pentagon’s Section 1260H designation carries reputational consequences but does not prohibit Wall Street firms from helping designated companies raise capital. The committee recommends legislation that would prohibit U.S. financial institutions from underwriting offerings for blacklisted Chinese entities and urges the Treasury Department to impose stronger sanctions authorities against CATL.

Chairman Moolenaar said: “American banks must not help Chinese military companies raise money, because in doing so, they provide not only access to funding, but also legitimacy and credibility to companies that are helping our adversary build up its military.”

Implications

The report is likely to fuel efforts in Congress to close the loophole, potentially disrupting the supply chains of major Western automakers that rely on CATL batteries. It also represents another step in the broader trend of U.S.-China financial decoupling, with implications for cross-border capital flows and the tension between Wall Street’s profit motives and national security concerns.

Ford is currently building a $3 billion battery plant in Michigan using CATL technology through a licensing arrangement designed to avoid Chinese ownership of the facility — a partnership that could face increased scrutiny in light of the committee’s findings.

As Congress considers legislative action, the question remains whether the current legal framework is sufficient to prevent American capital from flowing to companies that modernize China’s military capabilities — or whether new laws are needed to close what the committee calls a dangerous gap in national security policy.