The Zhejiang Private Company Merging Italy Applied Materials Is Controlled by Chinese Communist Party

 It was reported that Zhejiang Jingsheng Electromechanical Co., Ltd.(ZJE) tried to establish a joint venture with Semiconductor Equipment Factory Applied Materials Hong Kong Company to acquire Applied Materials' screen printing equipment business in Italy, but the Italian government took action to block the acquisition.

According to the accounts as of 31 December 2020 of ZJE, it is controlled by natural persons, but the chair of board of directors is a unit secretary of the Chinese Communist Party or Communist Party of China (CCP), the talent of the "Ten Thousand Talents Program", and directors are working in the 863 project and the State Key Laboratory of Silicon Materials of CCP.

Cao Jianwei and Qiu Xiumin, a married couple, jointly controlled 55% rights of voing in shareholders' voting, adding up voting rights of their children. 

Cao Jianwei, chairing the board of directors of ZJE since 2016 as General Manager (ie chief executive), is the unit secretary of CCP for the company and a talent in the CCP's National "Ten Thousand Talents Program". "Ten Thousand Talents Program" is used to support CCP's  key areas of national economic and social development, strategic emerging industries, basic disciplines, and basic research  and was implemented under the leadership of the Central Talent Work Coordination Group through relevant responsible parties from the Central Organization Department, the Ministry of Human Resources and Social Security, the Central Propaganda Department, the Ministry of Education, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission, the Chinese Academy of Sciences, the Academy of Social Sciences, and the Academy of Engineering.

Cao Jianwei

Qiu Minxiu, chairing the board of directors from November 2010 through Decemer 2016 and a director in ZJE, once enjoyed the special allowance of the State Council, served as  member of the third session of the China Hydraulic Technical Committee of the Fluid Power Transmission and Control Branch of the Mechanical Engineering Society, and a member of the Fifth National Hydraulic and Pneumatic Standardization Technical Committee.For many years, she has undertaken and participated in more than 30 projects of the National Natural Science Foundation of China, 863 Program projects, major national science and technology projects, and provincial and ministerial science and technology projects in the field of electro-hydraulic control technology. 

Qiu Minxiu

    

863 Program (ie National High Technology Research and Development Program) is supported by the central government allocations based technology plan with clear national objectives. The main tasks of the plan are: to solve the strategic, cutting-edge and forward-looking high-tech issues related to the long-term development and national security of the country, develop high-tech with independent intellectual property rights, cultivate growth points for high-tech industries, and strive to achieve leapfrog development. It was used to serve the realization of the national third-step strategic goal. 863 covered several themes and major special projects in high-tech fields such as information technology, biological and modern agricultural technology, new material technology, advanced manufacturing and automation technology, energy technology, resource and environmental technology, aerospace technology, advanced military technology, etc. The National 863 Program Coordination and Steering Group, the inter-ministerial coordination agency of the 863 Program approved by the State Council is responsible for coordinating major issues of the 863 Program and reporting important progress of the 863 Program to the Central Committee of CCP and the State Council of the People's Republic of China. The Ministry of Science and Technology, the General Armament Department of the People's Liberation Army of China (PLA) and the National Defense Science, Technology and Industry Commission are the organizing and implementing departments of the 863 Program. The Ministry of Science and Technology is responsible for compiling and reporting the annual total budget and final accounts to the Ministry of Finance. The management and use of planned funds of 863 Program shall be implemented in accordance with the "Management Measures for Special Funds for National High-Tech Research" (Caijiao [2001] No. 207) issued by the Ministry of Finance, the Ministry of Science and Technology of PRC, and the Ministry of General Equipment of PLA.

Mr. Yang Deren, Academician of Chinese Academy of Sciences & an independent director (ie non-executive director) of ZJE, worked in Metal Materials of Tohoku University, Japan Research Institute, FREIBERG University of Technology and other famous foreign research institutions are engaged in research work. In 2000, he was hired as a distinguished professor of the Yangtze River Award Program of the Ministry of Education. In 2002, he was awarded the "National Outstanding Youth Fund". He has been working in the State Key Laboratory of Silicon Materials at Zhejiang University since 1998, and served as the Dean of Ningbo Institute of Technology, Zhejiang University from 2020. Since December 2016, he has been an independent director of the company. Mr. Yang Deren also serves as director of Zhejiang Jinruihong Technology Co., Ltd., Jinruihong Microelectronics (Quzhou) Co., Ltd., Jinruihong Technology (Quzhou) Co., Ltd., and Hangzhou Foster Photovoltaic Materials Co., Ltd., Xinte Energy Co., Ltd., Zhejiang Zhongjing Independent Director of Technology Co., Ltd.

Yang Deren

It's not difficult to conclude that ZJE is controlled by CCP and at least works as a working unit of PLA of CCP.

Under the accounting standards of China and accounting policies of ZJE, government grant is also accounted under deferred income or other income. In the ZJE's 2020 accounts, given an unmodified opinion, it was disclosed that CN￥12,987,200.00 of fiscal subsidy was received. Most were used to subsidy annual production of 30 semiconductor-grade monocrystalline silicon growth equipment project and annual production of 30 high-efficiency crystalline silicon battery equipment project. All amortisation of deferred income were charged to other income, leaving ￥34,847,551.01 as balance most of which were of subsidy for the annual production of 25 million mm sapphire ingots ¥9,928,500.00 and subsidy for the annual production of 12 million pieces of sapphire cutting, grinding and polishing project  ¥7,458,744.68.  

The single largest amount directly accounted under other income was  ¥101,016,901.23 which was refunded value added tax immediately precede by payment of vat. Subsidy for the development and industrialization of oversized sapphire crystals, 6.7 million Chinese Yuan, was the second largest amount directly charged to other income.

There were  ¥49,688,801.37 subsidies received in cash in total by ZJE in 2020. 

ZJE has two subsidiaries, Jingsheng Electromechanical Japan Co., Ltd. and Prime Co., Ltd in Japan.