Chinese buying land in the US: A cause of concern among US lawmakers

(The Singapore Post) - The issue of US agricultural land being bought by the Chinese has hit national headlines in United States after the government watch dog recently pointed out in a report.  Even as Chinese billionaire, Tian Quaichen, recently became the second biggest foreign owner of land in the US, the issue of Chinese buying agricultural land has become a matter of serious concern.

The Government Accountability office (GOBA)’s report raised its concern over the rapid growth in the foreign investment in agricultural land. Ironically, the US Department of Agriculture (USDA) makes a limited track of such transactions thereby raising concern over the exact usage of land by foreign buyers. There is no concrete information about the volume of American agricultural land bought by foreign entities. As per the existing trend, the U.S. Department of Agriculture (USDA) only follows the transactions through a paper trail and informs other agencies, such as the Defence Department and the Committee on Foreign Investment in the United States (CFIUS), once a year. Former U.S. Ambassador to the United Nations Nikki Haley said that China “bought 400,000 acres [of U.S. farmland] near our military installations.” But the 400,000 acres is the total (rounded up) held by Chinese investors — not the amount near military installations, as she said. As per the government records, foreign investors own about 40 million acres of U.S. agricultural land and of that Chinese investors own 383,935 acres, or about 1% of foreign-held acres.

The fear is writ large among US lawmakers that China, could gain control over the U.S. food and energy supply, as well as a hold on markets and critical infrastructure. Many policymakers view as a strategic adversary even though it’s the country’s top trading partner outside North America. 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,” Sen. Jon Tester, D-Mont., who is sceptical of Chinese land ownership in the U.S., reportedly stated.  Those fears come amid broader tensions between the two countries on issues as varied as Taiwan, trade and Chinese intelligence gathering. Chinese acquisitions in the U.S., no matter how benign or how minor, are being viewed through that same lens.

Although Chinese-owned land is a tiny fraction of all foreign-owned land in the U.S., its purchases have raised fears that the Chinese government could have control, through the Chinese corporations, over U.S. assets or gain access to U.S.-based information. Indeed, during the past four decades, Chinese companies and investors have bought up land in the U.S. as well as purchased major food companies like Smithfield Foods, the United States’ largest pork processor. Corporations own the majority of that land. Now legislation in Congress would restrict Chinese ownership of U.S. land. In August, the NBC news investigations found that very few purchases were done by Chinese buyers in the past year and a half — fewer than 1,400 acres in a country with 1.3 billion acres of agricultural land. The total amount of U.S. agricultural land owned by Chinese interests was less than three-hundredths of 1 per cent.  But the review also revealed a federal oversight system in which reporting of foreign ownership was lax and enforcement minimal.

The NBC reported that any foreign individual or entity that ought or took on lease U.S. agricultural land was required by the federal law to report the transaction to the USDA within 90 days, yet some were not reported for years — in one case, more than 20 years. And in that same time period, no one has been fined more than 121,000 US dollars for failure to make such a report.

According to NBC News, as many as 11 purchases were done y Chinese entities between January1, 2022 to June 30, 2023 in 35 states. The USDA was aware of the deals. The most astonishing was that several of the disclosures were not recent sales, and at least one was a repeat of a previous disclosure. Another was not reported to the government till it had been revealed in the media. Smithfield Foods reported that it bought 186 acres in 2022 and 2023 in Missouri and North Carolina, adding to its existing U.S. portfolio of less than 128,000 acres, according to a company spokesman. Formerly a U.S. owned company, Smithfield Foods was bought by a Chinese firm in 2013.

Another company, Syngenta Group filed six disclosures of a total of 772 acres spread across Iowa, Florida and California, but the purchases had already been reported to the USDA when they were made under the company’s former owner, a Swiss company. Syngenta was bought by a Chinese firm in 2017. the company owns or leases a total of 6,000 acres in the U.S. According to available information, Chinese interests hold less than 400,000 acres.

Members of Congress are in favour of making tougher laws to regulate foreign land purchases as their presence can e a threat to national security. In 2021 two Chinese entities were together fined more than 135,000 US dollars for failing to disclose their purchases of more than 130,000 acres along the southern U.S. border in Texas more than 20 years earlier.

According to Forbes article Texas came up with the Lone Star Infrastructure Protection Act in 2021, meant for Prevention of business entities associated with “hostile nations” from accessing the Texas electricity grid and other pieces of “critical infrastructure,” including computer networks and waste treatment systems.

The bill came in response to a Chinese billionaire who had planned to build a wind farm in southwest Texas, according to its author, state senator Donna Campbell. Since 2016, a company owned by Xinjiang-based real estate tycoon Sun Guangxin had spent an estimated 110 million US dollars buying up land in Texas’ Val Verde County. Located on the Mexico border, Val Verde is home to about 50,000 people, the small town of Del Rio, family-owned hunting ranches—and Laughlin Air Force Base, a training ground for military pilots. In less than two years Sun bought up roughly 140,000 acres in the county through his subsidiaries. He had set aside 15,000 acres of that land for his company GH America Energy LLC to oversee the construction of a wind farm that could feed into Texas’ electricity grid, the Electric Reliability Council of Texas (ERCOT). Sun’s U.S. critics alleged that a wind farm controlled by a Chinese company would seek to tamper with, or even shut down, the embattled Texas energy grid; some speculated the turbines would be used to gather military intelligence on the activities of nearby Laughlin Air Force Base. Sun had ties with the Chinese Communist Party — including his company hiring army and government officials, and his personal relationship with authorities in China’s Xinjiang province — drew the attention of local and national politicians.Sun’s decision to invest in Texas was the result of Chinese Communist Party’s growing antagonistic toward private enterprise and wealthy business people. Senator Cruz stated that the Chinese Communist Party has demonstrated time and again they’re willing to invest billions of dollars to expand their espionage capabilities and their global reach, including through land purchase schemes near military bases.”