The Risks of Chinese Ownership of U.S. Land on National Security

The Chinese spy balloon incident of early 2023 painted a tangible picture of the growing problem of Chinese espionage, heightening concerns over the government’s intentions. Partly as a result, efforts at the state level to curtail foreign ownership of farmland and sensitive infrastructure have accelerated.

Legislatures in two-thirds of U.S. states are advancing bills aimed at curtailing purchases of real estate by Chinese-controlled interests. This legislation is almost entirely backed by Republicans. Legislation aimed at limiting the Chinese Communist Party’s (CCP) strategic penetration of the United States was recently passed in Georgia and South Dakota.

In Georgia, SB 420, which parallels new laws enacted in numerous other states, bans any “agent” of China from buying commercial land near military installations or any farmland. Democrats called it discriminatory, echoing CCP propaganda language. In March, South Dakota Gov. Kristi Noem signed HB 1231, which bars China, as well as Cuba, Iran, North Korea, Russia, and Venezuela, from purchasing farmland in the state. Much of this recent success in the states can be attributed to a new group, State Armor, which launched last year under Michael Lucci’s leadership.

These state-level initiatives demonstrate growing alarm over the national security implications of foreign land acquisitions. But opposition from business and real estate associations, concerns about economic effects, and diplomatic considerations — including directed pressure from the CCP via its United Front organizations — often present significant hurdles to the passage of such legislation. So despite frequent bipartisan support and recognition of the need for action, efforts to address foreign ownership of farmland and critical infrastructure at the state level have met with mixed success prior to this year.

Why Foreign Land Ownership Can Be a Problem

The landscape of American real estate purchases by Chinese nationals or businesses has undergone significant shifts in recent years. Initially driven by a desire to offshore savings away from the reach of the CCP and provide a home base for children attending prestigious universities, such investments have now expanded into the realm of farmland acquisitions, ringing national security alarm bells.

The reasons behind these farmland and food industry purchases are strategic and fit into four main categories — only one of which is mostly benign for U.S. interests.

Food Security: The CCP places significant emphasis on food security due to the historical impact of famines on China’s political stability. Acquiring farmland and food production facilities in the United States allows China to secure food supplies, mitigating potential risks from dependence on its domestic food production.

Intellectual Property: Chinese entities are seeking firsthand insights into American agricultural practices. America is no. 1 in food production, and China wants in on that. This knowledge can then be transferred back to China, mirroring the systematic approach the Chinese have taken in other industries, where they work through the supply chain from basic materials to complex products.

Espionage Opportunities: Another concerning trend is the proximity of Chinese-owned farmland and food production properties to sensitive U.S. military installations. This positioning provides opportunities for direct observation of military facilities and enhances electronic eavesdropping capabilities, as well as potentially serving as clandestine beachheads for Chinese espionage.

Biological Warfare: The presence of Chinese-owned farmland also raises concerns about the potential introduction of deadly pathogens into the U.S. food supply. While such attacks may not necessarily require large-scale farming operations, the ownership of farmland could facilitate the rapid dissemination of pathogens, devastating crops or livestock.

Efforts to address these national security risks through state or federal action typically face opposition from both the real estate lobby and the CCP. The latter may invoke comparisons to historical discriminatory legislation like the Chinese Exclusion Act to resist any regulatory measures.

Yet recent developments underscore the urgency of addressing these concerns. Revelations from an FBI investigation reveal China’s extensive efforts to establish electronic intelligence capabilities in the United States, particularly in areas adjacent to military installations. Chinese telecommunications giants including Huawei and ZTE have sold equipment to rural American providers, raising alarms about potential vulnerabilities in critical infrastructure.

The ZTE cell network equipment near strategic nuclear bases presents a grave threat to national security. Placing such infrastructure adjacent to military installations poses risks of electronic surveillance, signals jamming, and potential disruption of critical communications systems.

Using Real Estate for Surveillance and Theft

The history of China’s strategic mercantilism further highlights the need for vigilance. The PRC’s ascendancy in key industries, including telecommunications, has been fueled by policies aimed at buying or stealing foreign technology, leveraging joint ventures, and undercutting competitors on price. The decline of American manufacturing dominance in telecommunications serves as a cautionary tale of the consequences of inaction in the face of strategic competition.

The importance of strategic real estate is underscored by past incidents, such as China’s attempt to build the National China Garden in Washington, D.C. While this project was ultimately rejected due to national security concerns, private transactions often evade similar scrutiny until after the fact.

Recent acquisitions of farmland near military bases, such as the Fufeng Group’s purchase of land in Grand Forks, North Dakota, highlight the complex interplay between economic interests and national security imperatives. While proponents may argue for economic benefits and job creation, the potential risks associated with CCP involvement and strategic military purposes cannot be overlooked.

Adding to the concerns are recent examples of farm purchases close to military installations, including the acquisition of land by Chinese interests near Laughlin Air Force Base in Del Rio, Texas. This vast 140,000-acre ranch sits on the border with Mexico, raising alarms about potential coordination with transnational criminal organizations and the use of the land for activities beyond purely commercial purposes.

While food security is paramount, it’s also essential to recognize that the loss of one harvest cycle from disruption due to Chinese land ownership does not equate to permanent damage. America retains vast amounts of arable land, much of it not currently in production, ensuring resilience in the face of potential disruptions. China can’t take the land with it.

The FBI’s ongoing counterintelligence investigations and warnings from experts underscore the urgency of addressing the national security risks posed by Chinese-owned real estate. Failure to act swiftly and decisively leaves America vulnerable to a range of threats, from electronic espionage to biological warfare.

As the specter of a Chinese invasion of Taiwan looms, the need to safeguard America’s interests and defend against external threats has never been more pressing.