US Must Be ‘Vigilant’ of Chinese Investors Buying Farmland, Businesses: Commerce Secretary

U.S. Secretary of Commerce Gina Raimondo speaks at AmCham Shanghai's Women's Executive Network's 2023 WeForShe Conference in Shanghai, China, on Aug. 30, 2023. Aly Song/Pool/AFP via Getty Images

U.S. Commerce Secretary Gina Raimondo admitted there were “legitimate concerns” about Chinese investments in the United States and insisted that the Biden administration “will not compromise” on China-related semiconductor restrictions.

“We have to be real about those concerns,” Ms. Raimondo said in an interview with CNN. “So to the extent that Chinese investors, buying farmland, buying U.S. businesses, erodes our national security, then we should stop it.” Though a certain amount of investment is good for commerce, the Biden administration is being “vigilant about not allowing Chinese investment in the U.S. that we think hurts our national security,” she added.

Ms. Raimondo also responded to allegations of the government diluting the U.S. semiconductor ban on China. In October last year, the Biden administration unveiled export controls cutting off China from certain advanced semiconductor chips made with U.S. technologies. Such chips are used in many things, from pickup trucks to hypersonic missiles.

The administration has been criticized for undermining the semiconductor ban policy by giving some major firms “carve outs,” which are set to expire in October.

Some firms, like Taiwan Semiconductor Manufacturing Co., had obtained exemption from the rule. The exemption allowed TSMC, the biggest chip maker in the world, to continue expanding its facilities in China.

On this issue, Ms. Raimondo stated: “No one ever said we want to decouple from China as it relates to semiconductors. We ship billions of dollars of semiconductors every year to China that is good for the American economy and American businesses, and we will continue to do that. Those are chips that are readily available around the world.

“What we are going to do, and we will not compromise on, is preventing the sale of our most sophisticated, most powerful semiconductors to China, which China wants for its military,” she told CNN.

“No Commerce Secretary has been tougher than I on China. Almost a third of the companies from China on the Entity List have been put there under President Biden’s administration and my leadership of Commerce.”

On Aug. 30, Ms. Raimondo spoke at an event held by the American Chamber of Commerce in Shanghai, where she urged U.S. businesses to keep investing in the communist nation even as some firms complained that the economy was becoming difficult to invest in.

On Aug. 26, Ms. Raimondo remarked, “Increasingly, I hear from American business that China is uninvestable because it’s become too risky.”

American companies in China are facing challenges like hostile counterespionage laws and exorbitant fees “without any explanation,” she said. This is sending “shockwaves through the U.S. community.”

Chinese Threat to US Businesses, Security

Ms. Raimondo’s comments came as concern about Chinese companies is growing among U.S. lawmakers. On Aug. 30, Republicans and Democrats, along with industry and labor representatives, met at the Stoughton Trailers in Wisconsin to recognize the threat posed by the Chinese Communist Party (CCP) to American manufacturing.

Stoughton Trailers built a plant in the 1990s that made chassis and intermodal containers. However, the CCP’s subsidies to its domestic firms took away Stoughton Trailers’ business, according to Ron Jake, the company’s marketing manager.

Reps. Darin LaHood (R-Ill.), Mike Gallagher (R-Wis.), and Raja Krishnamoorthi (D-Ill.) listen to Stoughton Trailers' Bob Wahlin during a tour of a chassis production line at the company's facility in Stoughton, Wis., on Aug. 30, 2023. Nathan Worcester/The Epoch Times

The business recovered only after U.S. authorities imposed anti-dumping duties on Chinese manufacturers in 2021. “Once it was evident [that the duties] were going to go into place, that opened up this market for us, and it’s been gangbusters ever since,” Mr. Jake told The Epoch Times.

Mike Gallagher (R-Wis.), chair of the House Select Committee on the CCP, pointed out that American companies were being forced to compete with Chinese firms “that literally cannot go bankrupt or be underpriced.”

“In the case of Stoughton Trailers, their Chinese competitors were selling products into the [United States] for less than the cost of the raw materials used to produce them. That’s not competition. That is a disease.”

In October last year, a group of House Republicans wrote a letter to the Government Accountability Office (GAO), raising concerns about foreign investment in American farmland and its “impact on national security, trade, and food security.”

“While investors from Canada, Germany, and the United Kingdom are regularly among the top foreign investors, investors from countries such as China and Saudi Arabia have increased their investment in U.S. agricultural land,” said the letter (pdf).

“Concerns about national security, including a Chinese company’s purchase of farmland in North Dakota near an Air Force base that is home to top-secret drone technology, drive fears of foreign ownership of U.S. agricultural land.”

Tightening US Restrictions on Investing in China

The government is tightening restrictions on American capital flow to China. Last month, President Joe Biden signed an executive order blocking and regulating high-tech U.S.-based investments from going to the nation.

The Chinese Ministry of Commerce said it had “serious concerns” about the order.

The executive order applies to microelectronics, artificial intelligence, quantum information technologies, and advanced computer chips.

In an interview with The Associated Press, J. Philip Ludvigson, a lawyer and former Treasury official, said that the order “really represents the start of a conversation between the U.S. government and industry regarding the details of the ultimate screening regime.”

Though the executive order only applies to a few technologies initially, “it explicitly provides for a future broadening to other sectors.”

The executive order is focused on areas like joint partnerships, venture capital, and private equity, in which investments could potentially give nations of concern like China more military capabilities. The U.S. Treasury Department is tasked with monitoring investments under the policy.

Nathan Worcester contributed to this report.