The answer is a resounding, “No!” For decades, we Americans have blithely ignored the long-term effects of allowing foreign investors or corporations to purchase the assets of our country in the form of companies, land, and mineral resources. We have been selling off our ability to produce wealth by allowing foreign corporations to purchase American companies, real estate, mines, and farm land. It is not just foreign companies buying our assets that is the problem ? it is the state-owned and massively subsidized companies of China that are the danger because China uses its state-owned enterprises as a strategic tool of the state. By pretending they are private companies abiding by free-market rules makes us the biggest chumps on the planet.
We didn’t let the USSR buy our companies, real estate, or farmland during the Cold War. We realized that we would be helping our enemy. This was pretty simple, common sense, but we haven’t had this same common sense when dealing with China.
Most foreign countries don’t allow 100% foreign ownership of their businesses, but sadly, the United States does not exercise the same prudence. We allow sales of U. S. companies to foreign companies unless there are national security issues, such as technologies that are utilized by our military and defense systems. We should be equally protective of our natural resources and farmland to ensure the health and welfare of all Americans.
In theory, we have the means to prohibit certain foreign investors or companies from acquiring U.S. assets that would pose a threat to our national security. The Committee on Foreign Investment in the United States (CFIUS) is the inter-agency body charged with conducting national security reviews for certain foreign investments in the United States. CFIUS retains the authority to review a transaction that could result in foreign control of any U.S. business and has the power to regulate, approve and deny these acquisitions. Australia, Canada, New Zealand and the United Kingdom are exempt from CFIUS reviews CFIUS submits an annual report to Congress and the most recent report was submitted on July 31, 2023.However, CFIUS has not been a member of the interagency Committee, so acquisitions of farmland were not reviewed with regard to impacting our national security.
CFIUS reviews were expanded when the President Bush signed H.R. 556, Foreign Investment and National Security Act of 2007(FINSA) on July 26, 2007 after the Dubai Ports World transaction passed through CFIUS without a formal investigation, leaving a surprised and angry Congress determined to avoid a repetition of that scenario.
The scope of CFIUS reviews was expanded when the Foreign Investment Risk Review Modernization Act of 2018 was passed by Congress on June 26, 2018. “The FIRRMA-amended CFIUS process maintains the President’s authority to block or suspend proposed or pending foreign “mergers, acquisitions, or takeovers” of U.S. entities, including through joint ventures, that threaten to impair the national security.” It expanded the jurisdiction of CFIUS to address growing national security concerns over foreign exploitation of certain investment structures which traditionally have fallen outside of CFIUS reviews.
According to the IPM News article of June 27, 2023, “Chinese firms and investors own just over 383,934 acres in the U.S., less than the state of Rhode Island, and far less than how much Canada, Netherlands, Italy, the U.K. and Germany, in that order, each own. China is No. 18 on the list of foreign investors.” Sen. Jon Tester (D-Montana) who is skeptical of Chinese land ownership in the U.S., told NPR, “I don’t know that we know for sure all the foreign land that potentially is owned by Chinese individuals or folks controlled by the Chinese government…Any company and any individual living in China that comes and tries to buy land can be controlled by the Chinese Communist Party because they have that kind of control over their people.” Tester said.
What is enabling Chinese companies to go on a buying spree of American assets? Trade deficits – our ever-increasing trade deficit with China over the past 20 years is transferring America’s wealth to China and making millionaires out of many Chinese. In 1994, our trade deficit with China was $29.5 billion, and it grew to $83.8 by 2001 when China was granted “Most Favored Nation” status and admitted to the World Trade Organization. By 2004, it had doubled to $162.3 billion. After a slight dip in 2009 during the depths of the Great Recession, the trade deficit grew to a high of $418 billion in 2018. It dropped down in $352.8 billion in 2021 and $382 billion in 2022 due to the COVID Pandemic shutdowns and was $257 billion in 2023.
On January 26, 2017, Robert D. Atkinson, President of the Information Technology and Innovation Foundation, testified at a hearing on “Chinese Investment in the United States: Impacts and Issues for Policymakers” before the U.S.-China Economic and Security Review Commission. He testified: “For many years, China has recycled the earnings from its large and sustained trade deficit with the United States into U.S. Treasury bills. But the last few years have seen a marked increase in the amount of inward foreign direct investment (FDI) from China to the United States, across a range of industries. While the underlying motivation for some of this investment is commercial, at least one-third is from Chinese state-owned enterprises, and it is likely that considerably more is guided and supported by the Chinese government, specifically targeting sectors that are strategically important for U.S. national security or economic leadership.”
As reported in The China Project article of November 6, 2023, “Chinese ownership of American farmland came under increased scrutiny at both the national and local level after the Fufeng Group, producer of the flavor enhancer MSG, announced in November 2021 its intentions to invest near Grand Forks, North Dakota…Arkansas, Florida, Louisiana, Montana, North Dakota, Ohio and three more states have since passed legislation that restricts some land ownership for Chinese citizens or companies.
The Florida law, for example, bans Chinese owners from buying land “within 10 miles of any military installation or critical infrastructure facility” such as seaports, airports and wastewater treatment plants. The law doesn’t apply to purchases made before July of 2023, but current owners must register their property with the state by January 2024 or face fines and the risk of state authorities seizing their land.
Montana’s governor in May signed legislation that prohibits Chinese individuals and companies from buying farmland, critical infrastructure, and homes near military facilities. Other states have passed laws that put a cap on the number of acres Chinese buyers may own.”
However, on February 2, 2024, the Epoch Times reported, “A federal appeals court has issued a limited temporary block on a Florida law that bans citizens of China from buying property in the state that Florida Gov. Ron DeSantis said was needed to counteract the “malign influence” of the Chinese Communist Party (CCP) in his state.”
It is probable that the prohibition of Chinese investors and companies buying agricultural land will have to be handled at the national level, instead of by states. On January 5, 2024, the Congressional Research Service issued a brief, titled, “Selected Recent Actions Involving Foreign Ownership and Investment in U.S. Food and Agriculture” stating “Some Members of Congress have introduced a series of bills that would amend existing federal law to impose additional requirements on and review of foreign ownership of U.S. agricultural land and/or foreign investment in the U.S. food and beverage industry…Bills in the 118th Congress that would establish additional restrictions include H.R. 212, H.R. 344, H.R. 683/S. 168, H.R. 809, H.R. 840, H.R. 917/S. 369, H.R. 1448, H.R. 3357/S. 926, S. 684, and S. 1136.”
In addition, the House Select Committee on China released a bipartisan report on U.S.-China economic competition on Dec. 12, 2023 that “includes nearly 150 policy recommendations, of which a majority are supported by bipartisan members of the CSC, geared toward strengthening U.S. economic competitiveness vis-à-vis China.”
I am happy that legislators are finally waking up to the real dangers of our relationship with China. The Communist Chinese government is not our friend. China a geopolitical rival that has a written plan to become the Super Power of the 21st Century. Letting Chinese corporations acquire American companies, especially energy or technology-based companies is the biggest threat to rebuilding American manufacturing. Protecting our food supply is also an important component of protecting our national security. Therefore, we must prohibit Chinese acquisition of American farmland.
Tags: legislation, national security