North Carolina lawmakers are cracking down on foreign investments of U.S. farmland.
A bill that would prevent hostile foreign countries including China and state-owned entities from buying farmland or any land within 25 miles of a military base received unanimous approval from North Carolina House lawmakers on Wednesday. The bill now heads to the state Senate, making the Tar Heel State one of the latest to pass such restrictive measures.
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"What triggered the conversation of building this bill was the spy balloon and that security risk to North Carolina as it flew over," said Republican State Representative Jennifer Balkcom. Balkcom co-sponsored the legislation with North Carolina House Majority Leader John Bell.
"We just want to protect the farmland if possible. And this is just a tool in the toolbox for North Carolina to help do that," Balkcom continued.
Gatestone Institute senior fellow and China expert Gordon Chang echoed these concerns during an interview on FOX Business' "Mornings with Maria" last week.
"We definitely need to be worried about Chinese investment into our agricultural sector," he told Maria Bartiromo Wednesday.
"You remember a couple of years ago, China was sending in invasive species seeds into the United States, unsolicited," he continued. "Now, if the Chinese were to own more and more agriculture, they could very well plant those seeds and actually blight America's food production."
As of this month, 11 states have considered banning Chinese investments into U.S. farmland, according to the National Agricultural Law Center. Four states, Arkansas, Idaho, Utah and Virginia, have enacted restrictions; legislatures in Montana and North Dakota passed restrictions, the center reports.
"This is not the first time in our nation’s history that this issue has appeared," said Micah Brown, a research fellow at the National Agricultural Law Center. "This is actually kind of the fifth political flashpoint."
The recent scrutiny of foreign ownership of farmland in states like North Carolina is putting a spotlight on Smithfield Foods, the world’s largest pork producer. It was acquired 10 years ago by a Hong Kong-based company now known as WH Group.
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"No company based in China or Hong Kong can escape control from the Chinese Communist Party," explained Miles Yu, former advisor to Secretary of State Mike Pompeo and director of the China Center at Hudson Institute.
"It's a law. So by law, every company that is within the Chinese sovereign domain must comply with the Chinese Communist Party's demand," Yu said.
Another factor Yu finds concerning is the financing for the 10-year-old deal. Smithfield’s acquisition, which was approved at the time by the Committee on Foreign Investment in the United States, was financed by the Bank of China, the nation’s government-backed bank.
"That means Bank of China owns you," said Yu. "If you have that your financial backer is a Chinese official government institution, and then Chinese government exerts essential control."
But executives of the 87-year-old Smithfield say the Chinese government exerts no influence or control over its American pork production.
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Smithfield is headquartered in Smithfield, Virginia, with operations in 29 states, including North Carolina. According to the company, Smithfield employs 40,000 workers in the U.S., owns 500 farms, and works with more than 2,100 local hog farmers. The company says it exports about 30% of its pork production globally.
"The exports that we enable contribute significantly to farmer prosperity," says Smithfield Foods Vice President of Corporate Affairs Jim Monroe.
Smithfield says the company will not be impacted by North Carolina’s proposed restriction on foreign investment in agricultural land because it is owned by China-based WH Group, not the Chinese government.
State representative Balkcom agrees the proposal is not intended to impact Smithfield.
"I think they've been a good group for us. So that's why this legislation isn't going to hurt them, and we didn't want to do that when we were looking at it," Balkcom said.
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But when asked about a "contingency plan" should China and the U.S. ever engage in conflict, Smithfield declined to speculate.
"We hope that doesn’t happen. We’re going to focus on doing what we do best, which is raising affordable, nutritious, healthy protein," said Monroe.
FOX Business' Madeline Coggins contributed to this report.
