The Biden administration just cleared a Chinese company to own 370 acres of land within 12 miles of Grand Forks Air Force Base in Grand Forks, North Dakota.
As a result, China will be able to use a proposed $700 million corn milling plant on the site to spy on military communications and even disrupt them. In Beijing, they must be shaking their heads in disbelief at the inability of the U.S. to protect some of its most sensitive communications.
The Committee on Foreign Investment in the United States, a Treasury Department-led interagency task force, decided that the purchase was not a “covered transaction” within the meaning of Section 721 of the Defense Production Act of 1950. Therefore, CFIUS, as the agency is known, decided it did not have jurisdiction to block the land purchase.
CFIUS is correct in its statutory reading. As trade and investment expert Alan Tonelson told Gatestone, the task force “did not need more than five minutes to determine that it did not have the authority to stop the sale.”
The Foreign Investment Risk Review Modernization Act of 2018 authorized CFIUS to review, among other things, purchases by foreign parties of land close to “specific airports, maritime ports, or military installations.” Those military facilities are listed in an appendix to regulations.
“Grand Forks Air Force Base did not make the cut,” Tonelson, who blogs at RealityChek, said. “The decision of the Congressional authors of the recent CFIUS reform to permit any foreign purchase of any land near any U.S. military installation was a clear case of legislative malpractice.”
Moreover, the failure to include all military installations in the implementing regulations was a clear case of regulatory malpractice.
As a result of these enormous mistakes, Fufeng USA, a subsidiary of a Shandong province-based agribusiness giant, is, at least for the moment, free to build its wet corn milling and biofermentation plant in Grand Forks.
Fufeng USA said it was “pleased” with the decision. Chinese war planners must be ecstatic.
“The Chinese will now have the ability to conduct passive, persistent surveillance of both signals controlling experimental drones that are routinely tested at that USAF facility as well as signals that are routinely beamed to and from sensitive U.S. military satellites,” said Brandon Weichert, author of Winning Space: How America Remains a Superpower, to this publication.
Yet that is not all. “The worst-case scenario involves active sabotage of operations at the Grand Forks facility,” Weichert points out. “Should the U.S. and China end up in a shooting war over, say, Taiwan, Fufeng’s property near the Air Force base could be used to send malicious signals to jam passing satellites or disrupt the operation of drones. We have made ourselves vulnerable on our own territory.”
This is not just a theoretical concern. In the Chinese Communist Party’s top-down system, no Chinese entity or individual can resist one of its demands.
Moreover, Articles 7 and 14 of China’s National Intelligence Law of 2017 requires every Chinese party to spy upon receipt of an order to do so.
So, what to do?
“The fight is not over,” said Jodi Carlson, a Grand Forks resident, to Hong Kong’s South China Morning Post, referring to the Fufeng plant.
President Joe Biden can use his authority under the International Emergency Economic Powers Act of 1977 to block the sale of the Grand Forks land and the building of the milling facility.
For future cases, Tonelson says, “either the law needs to be rewritten immediately to bring such cases under CFIUS purview or the President should issue an executive order mandating this change.”
There is a larger issue. As Weichert asks, “What other purchases by foreigners have slipped through the cracks?”
“As long as we’re talking about fixing things, we ought to start with the most serious problem: The Committee is chaired by Treasury, which never saw a foreign investment it did not approve,” Frank Gaffney, vice chair of the Committee on the Present Danger: China, told Gatestone. “This means, as a practical matter, that an agency that basically doesn’t give a damn about national security is entrusted with running a process that supposedly evaluates and protects national security.”
Consequently, CFIUS rarely turns down foreign purchases, “precious few” as he says.
Gaffney believes the CFIUS mandate must be broadened “to include any foreign investment that threatens our national security interests or, for that matter, other vital interests, in the face of unrestricted and especially economic warfare.”
China’s regime, for instance, has for decades launched broad-based assaults on America, and the current CFIUS framework is inadequate to deal with such threats.
Yes, America is strong because of its open system, which has allowed foreign parties to invest and strengthen the American economy. Yet China’s regime, which has declared a “people’s war” on the U.S., uses investments to undermine America. In wartime — the Communist Party believes it is currently in such a struggle with America — Washington needs to prohibit all investments from China, especially ones near critical Air Force installations in North Dakota.
Gordon G. Chang is the author of The Coming Collapse of China, a Gatestone Institute distinguished senior fellow, and a member of its Advisory Board.