China Buys Up US Farmland by Exploiting Loopholes to Undermine US National Security: Security Expert

Airmen assigned to the 319th Aircraft Maintenance Squadron from Grand Forks Air Force Base, North Dakota, tow an RQ-4 Block 30 Global Hawk remotely piloted aircraft on June 6, 2022. U.S. Air Force photo by Senior Airman Ashley Richards

China is exploiting loopholes to buy up U.S. farmland with the aim of sabotaging the U.S. national security, warned Ross Kennedy, founder of U.S.-based logistics and supply chain advisory Fortis Analysis and senior fellow at Security Studies Group.

Reports have emerged that Chinese companies in recent years have ramped up purchasing U.S. farmland for various projects ranging from green energy to agriculture. Local authorities have justified greenlighting these ventures by arguing that the projects would help generate jobs and tax revenue in their regions.

“Whenever these Chinese companies come to the United States with the promises of economic development, they’re exploiting gaps in our own industrial manufacturing and infrastructure base,” Kennedy told “China in Focus” on NTD, a sister media outlet of The Epoch Times, on Dec. 17.

“They’re going to exploit every loophole … every means within their arsenal of tactics and tricks and strategies, to undermine the national security of the United States,” he added.

He pointed to the acquisition of 140,000 acres of farmland in Val Verde County, Texas, since 2016, by a Chinese billionaire to build a wind farm.

“So in the case of the Texas wind farms, it was that that part of Texas can be pretty deficit of energy at certain times a year, and the tax credit structure for wind farms, the need for additional energy in that part of the state of Texas, all of that was exploited to say, ‘Well, you really need these wind farms. We’ll buy this land, we’ll take on the burden of building it, we’ll put energy back into the grid,'” he said.

Kennedy noted that the purchased farmland in Texas is located in the border town of Del Rio, next to Laughlin Air Force Base.

He further singled out the purchase of 370 acres of land in North Dakota by Fufeng Group, an entity whose owner has close ties to the CCP, to set up a corn mill plant.

The proposed project is located about 12 miles from the Grand Forks Air Force Base.

Given the proximity of these projects to U.S. military bases, Kennedy noted that the Chinese entities are inclined to target those states, “where we do have a lot of military infrastructure, especially Air Force and Space Force installations that do a lot with data transmission, telecommunications, aerospace type things.”

These locations would enable the Chinese entities to “conduct passive, active intelligence signals gathering, electronic intelligence, counterespionage,” among others.

National Security Risks

In the case of the North Dakota agricultural land transaction, Kennedy believes that the city of Grand Forks played a role in helping the Chinese group circumvent the national security protocols.

In the fall of 2021, Fufeng bought 370 acres of land in North Dakota for $2.6 million. The city of Grand Forks approved the development agreement for the corn mill project in July.

The deal was done after the City Council voted to annex the property. The city then changed the parcel’s designation from an agricultural zone to an industrial zone to allow the project to move forward under federal law.

In September, the city put holds on Fufeng-related infrastructure projects due to a review by The Committee on Foreign Investment in the United States (CFIUS).

The intervention of CFIUS came after the two senators representing the state had called out national security concerns associated with the venture.

On Dec. 12, CFIUS determined the land sale for the Chinese corn mill project in North Dakota was “not a ‘covered transaction’” under the Committee’s jurisdiction, and, thus, those holds were lifted.

“The city of Grand Forks very transparently and very openly did everything they could, within their legal authorities, to pave the way for this transaction forward both at the state level and at a federal level,” Kennedy opined.

“When you look at the timing of rezoning, the timing of purchases of the land, the timing of a lot of these things, there were a number of thresholds that had to be cleared from a legal standpoint, and a regulatory standpoint, to get us here,” he said.

“And so to structure the deal in such a way that it avoided CFIUS oversight, and that it did not run afoul of North Dakota century codes, rules on foreign ownership of land and the state, they threaded a very narrow, deliberate path here to make sure this transaction happened the way it did, without the ability of CFIUS to pull it in for review,” he added.

In response, Todd Feland, the city administrator of Grand Forks, said that Kennedy’s claims are “false.”

“[T]he City of Grand Forks via the Development Agreement requested Fufeng USA to submit to the CFIUS process and Fufeng USA complied along with the three private property owners who were involved in the property transaction,” Feland told The Epoch Times in an email.

“The City of Grand Forks was and is not a party to the transaction and did not have any involvement in the CFIUS process, review, and ultimate decision of CFIUS. The City of Grand Forks has been advised by our CFIUS consultant, Cooley Law Firm, that the CFIUS process is thorough and exhaustive and ultimate decisions by CFIUS are objective and factual,” he added.

“The City of Grand Forks as a local government has no authority or influence over Federal reviews and decisions to include the noted CFIUS review and decision.”

In Kennedy’s opinion, the CFIUS review was inadequate.

“They knew about the transaction months in advance. They waited until after the fact, till the land was already sold, and then said, “Well, the sale happened, the land is done. It’s already moved on. We don’t have jurisdiction now. There were a lot of misses here deliberately,” he said.

“So I think on the part of some of the CFIUS agencies to not have reviewed this and then be able to throw their hands up and say, ‘Well, we did what we could,’ they didn’t truly do what they could there,” he added.

Pushing Back

Kennedy further suggested “a multi-tiered approach” to tackle this practice going forward.

“In my view, particularly states that host military bases and military infrastructure, those states in particular, have an enormous responsibility to lead on this issue,” he said.

“Doing it at the state level also gives us the opportunity for both a civilian and the military infrastructure to cooperate closely in real time,” he added.

He took note of the fact that South Dakota had already taken action after the deals were brought to light.

South Dakota Gov. Kristi Noem announced on Dec. 13 new proposed legislation to restrict farmland purchases by foreign countries, namely China.

“We could put provisions into the farm bill about foreign ownership of land or land that has been receiving payments from the U.S. government for the last 10 years, not being able to be purchased by foreign entities for at least 5 years after receipt of government payments,” he said.

“Things like that need to be thought of and implemented at the state and federal level, so that we don’t have opportunities for entities to come in and exploit,” he added.

In his opinion, U.S. citizens could also play a role.

“Citizens have, depending on the state, a lot of ability to influence their local political leaders—their state representative, their state senator, even their mayor—to create a groundswell of support for similar sorts of legislation in each state,” he said.

“As these things become known to the public, citizens that have the ability should take action, they should demand that similar legislation be passed in their own states, and be a part of making sure that that legislation works and is targeted correctly,” he said.

The Epoch Times has reached out to CFIUS, Fufeng USA, and the Chinese company behind the Texas wind farm project for comment.

This article was updated to include a statement from the city administrator of Grand Folks.