/States rushing to enact bans on Chinese purchases of American farms – The Washington Post

States rushing to enact bans on Chinese purchases of American farms – The Washington Post

Mushrooming anti-China sentiment also means fresh scrutiny for the owner of this farm, Smithfield Foods, which was acquired in 2013 by a Chinese company, WH Group. Now, as lawmakers jockey to demonstrate their toughness toward China, Smithfield executives are exasperated by suggestions that Chinese ownership of American land threatens the United States.

With relations between the United States and China near a 40-year low, Chinese ownership of American farmland has suddenly flared into controversy. Twenty-seven states, including Missouri, are considering proposals that would ban or restrict foreign acquisitions of agricultural land. Congress may require future sales to be cleared by a government investment committee.

The furor is striking, considering China’s modest holdings. Chinese entities own fewer than 3 out of every 10,000 acres of privately held American land, according to U.S. Agriculture Department figures. Tiny Luxembourg owns more.

But lawmakers say the Chinese government could use future deals, including by private companies, to conduct espionage or imperil the nation’s food supply. The town of Grand Forks, N.D., in February dropped its support for allowing a Chinese company to build a corn milling plant on land it had purchased 12 miles from a U.S. military base, after the Air Force said the project posed “a significant threat to national security.”

Beijing shows little sign of an imminent spending spree: China’s annual investment in all U.S. industries plunged by more than 90 percent since peaking at $49 billion in 2016, according to the Rhodium Group, a New York-based consultancy.

The proposed restrictions on Chinese land purchases also reflect growing suspicion of Chinese President Xi Jinping. His domestic repression and foreign assertiveness have damaged China’s international standing while his embrace of greater state control over the economy has blurred the line between China’s private sector companies and the government.

Yet if many politicians see only danger in China ties, the view on the ground is more nuanced. Smithfield is one of the largest economic actors across a broad swathe of rural Missouri, employing about 2,800 people and contracting with 110 family-owned farms.

Its 2013 acquisition by W.H. Group — then known as Shuanghui International — drew fire from some American politicians who feared it would mean higher costs for consumers. But the Chinese buyer said it wanted a reliable pork supply to meet the needs of a growing middle class in China. And Shuanghui was far from the first foreign player in the U.S. food industry. After a three-month review, the interagency Committee on Foreign Investment in the United States (CFIUS) approved the deal.

W.H. Group is a publicly traded company on the Hong Kong Stock Exchange, meaning its executives have an obligation to maximize the profits that drive stock values higher. Since the Chinese takeover, Smithfield’s revenue has grown by more than one-third to $17.6 billion. Its 40,000-worker payroll is up from 37,000 a decade ago. The company’s headquarters remain in Smithfield, Va., where it has been since 1936.

Scott Whitworth, 55, a farmer in Worthington, a nearby village of about 50 people, has been doing business with the company for roughly 20 years. He runs his affairs from a one-story former schoolhouse that was built by the Depression-era Works Progress Administration (WPA).

Whitworth supplies the pork producer with lubricants, equipment and fertilizer while raising his own hogs and cattle. He still deals with the same Smithfield representative that he did before the Chinese took over. If anything happened to Smithfield, he said, it would “just devastate” the local economy.

In Missouri, foreign ownership of farms has long been a political flash point. State law limits total foreign ownership to 1 percent of agricultural acreage. In the state’s U.S. Senate race last year, Democrat Trudy Busch Valentine blasted Republican Eric Schmitt for voting in 2013 to relax ownership limits, a move that allowed W.H. Group to acquire Smithfield’s 130,000 Missouri acres.

State Sen. Bill Eigel (R) has proposed a flat ban on foreign purchases of real estate, including agricultural land. He also worries about the influence in Missouri of the World Economic Forum, the Swiss nonprofit that is a bête noire of antiglobalist forces.

“China owning Smithfield and whatever land they’ve got — it don’t amount to anything,” said Phil Howerton, 71, who raises hogs about 65 miles southeast of Kansas City. “It’s pretty easy to be against it, if you don’t have land for sale.”

Farmer Scott Hays, 55, said he was “very nervous” about the U.S.-China relationship. For years, American farmers have supplied China with soybeans, corn, beef and pork while Chinese factories filled the shelves of Walmart and Target with affordable clothes and electronics, he said.

“It’s unfortunate we’ve got ourselves in this situation of distrust,” he said. “I don’t trust them either. But gosh dang, we’ve got more that we could work together on than fight over. The common man in both countries won’t do well if we keep going in this direction.”