Congress Sounds Alarm On Chinese Purchases Of US Farmland

Chinese interests are actively purchasing U.S. farmland, raising security concerns and increasing tensions between Washington and Beijing. The strategy apparently aims to meet soaring domestic demand and bolster China’s agricultural sector, which is plagued by decreasing arable land and polluted water. Wealthy Chinese private investors have also resumed real estate purchases in the U.S., mainly in California and New York, for safe investments and housing for family members attending American schools.

The recent flight of a Chinese surveillance balloon over sensitive military sites in the U.S. has intensified efforts in federal and state governments to counteract this buying trend. Legislation in Texas, Florida, Arkansas, and other states has been introduced to prohibit Chinese citizens from buying real estate based on national security concerns. In total, 14 states restrict or ban foreign ownership of private agricultural land, while nine of them are considering additional limitations on foreign land purchases.

China’s decreasing arable land, large-scale water pollution, and domestic livestock diseases have driven the Chinese government to seek American farmland and intellectual property related to agricultural production. Chinese investment targets include land, livestock and supporting infrastructure such as grain elevators and mills. Owning these assets in both the U.S. and China allows Chinese agricultural producers to diversify supply and mitigate risks from events like natural disasters.

A significant purchase approved by the Obama administration in 2013 was Smithfield Foods Inc., the largest pork producer in the U.S. The Chinese government supported the $4.7 billion acquisition by Shuanghui International Holdings Ltd., a subsidiary of the Chinese company W.H. Group, and accounts for much of the U.S. farmland now owned by Chinese interests.

In the Senate, bipartisan efforts are being made to block China, Iran, North Korea, and Russia from buying or leasing farmland. Additionally, a bipartisan House majority has passed a measure to prevent Chinese investment in U.S. land vital for producing renewable energy. The measure is derived from the Defend America’s Rural Energy Act and received support from Republicans and Democrats.

While Chinese investors own just under 1% of all foreign-held land in the U.S. as of 2021, land acquisition by Chinese nationals has accelerated. From 2010 to 2021, purchases from the country have increased from 13,720 acres to over 380,000 acres, a nearly 30-fold increase in just over a decade. Nevertheless, recent Chinese land ownership has faced resistance, such as in North Dakota, where Chinese agribusiness Fufeng Group purchased 370 acres of farmland near a sensitive air force base. The U.S. Air Force warned that the project posed a “significant threat to national security.”

As more Chinese investors purchase land, including for agricultural use, the Committee on Foreign Investment in the United States should use its oversight to safeguard vital military assets. The increasing Chinese investments near military facilities are a grave concern, particularly since tensions with China are at an all-time high. State lawmakers from Texas and Florida are also making similar pushes to counteract the purchasing trend.