Is China Buying U.S. Land And Why?

‍People who watch the news might see a trending topic about China’s presence in the United States. Is China buying US land? Why?

China is buying land in the US. China owns roughly 384,000 acres of US agricultural land.  Land under Chinese foreign ownership is mostly agricultural land and is worth almost $2 billion. There are concerns that foreign land ownership could lead to food supply and food security problems.

We’ll explore specifics about what China is doing buying land in the US. We’ll report about where they are buying land and potentially speculate about why.

‍Current State of Chinese Investment in the US

Overview of Chinese Investment in the US

Chinese investment in the US has been a topic of controversy for many years. While some believe it is a threat to national security, others argue that it is a necessary component of global trade. A report by the American Enterprise Institute indicates that Chinese investment in the US has declined significantly since 2017.

Types of Land Purchased by Chinese Investors

One area of concern is the purchase of US farmland by Chinese investors. As of 2020 Chinese owners controlled less than a quarter billion agricultural acres in the US which is valued at about $2 billion. This land includes agricultural land used for growing crops and raising animals. Chinese owners held about 350,000 acres at the end of 2020, according to a US Department of Agriculture report, and most of the farmland came from the Chinese acquisition of Smithfield Foods. If China continues to purchase more companies that own land the government sees this as a potential food security issue coming.

You should also know that the amount of land available in the US for agriculture represents a very small amount of currently held u.s farmland. Given the amount of u.s agricultural land owned by US based investors, food security isn’t an issue yet.

Another area of concern is the purchase of US real estate by Chinese investors. In 2023, Texas passed a law banning Chinese companies from buying land in the state including foreign held agricultural land. The bill was a direct response to one Chinese billionaire's plans to build a wind farm in southwest Texas, according to Forbes.

Recent Trends in Chinese Investment in the US

Recent trends in Chinese investment in the US suggest that the decline in investment may be due to a combination of factors. Current trends affecting investment include the US-China trade war and increased scrutiny of Chinese investment by US regulators. The pandemic might also have an impact. In 2020, Chinese investment in the US was only $5 billion, down from $13 billion in 2019, according to the Rhodium Group. However, Chinese investment in the US may be on the rise again. In 2023, it is predicted that Chinese investment in the US will rise, but it will still be difficult to regain the 2017 level of $23 billion.

Chinese investment in the US has been a controversial topic for many years. While some argue that it is a necessary component of global trade, others believe it is a threat to national security.

Reasons for Chinese Investment in the US

Economic Motivations

One of the main reasons for Chinese investment in the US is economic. The US has a stable and growing economy, and Chinese investors see the US as a safe place to invest their money. The US also has a large consumer market making it an attractive destination for Chinese companies looking to expand their business. A  well-developed financial system and a strong legal framework do make it easier for Chinese companies to do business in the country.

Additional economic motivations for Chinese investment in the US are the desire to diversify their assets. China has a large amount of foreign currency reserves so investing in the US allows them to diversify their investments and reduce their exposure to risk. Investing in the US allows Chinese companies can also gain access to new technologies which can help them improve their own products and services.

Political Motivations

Chinese investment in the US is also driven by political motivations. The Chinese government sees investment in the US as a way to build stronger ties with the country and to promote Chinese interests abroad. China can also gain access to US technology and expertise which can help it to develop its own economy.

Another political motivation for Chinese investment in the US is the desire to gain influence and power in the country. By investing in US companies and real estate, China can gain a foothold in the country and exert influence over its policies and decision-making processes. This has raised concerns among US policymakers who worry about the potential national security implications of Chinese investment in the country.

Social and Cultural Motivations

Buying property in the US  is also driven by social and cultural motivations. Many Chinese investors see the US as a desirable place to live and work so they want to invest in the country as a way to gain access to its culture and lifestyle. Chinese investors are also attracted to the US education system which is considered to be one of the best in the world. Investment encourages the potential for Chinese families can send their children to study in the country and gain valuable experience and knowledge.

Another motivation for Chinese investment in the US is the desire to improve China's image abroad. By investing in the US, China can show the world that it is a major player in the global economy and that it is committed to building strong ties with other countries. This can help to improve China's reputation and increase its soft power on the world stage.

Impact of Chinese Investment in the US

Positive Effects on the US Economy

Chinese investment in the US has had some positive effects on the US economy. One of the most significant benefits is the creation of jobs. Chinese companies have invested in the US, creating jobs for Americans. This investment has been particularly significant in the manufacturing sector, where Chinese companies have invested in factories and production facilities. This investment has helped to create jobs for Americans and has boosted the US economy.

Another positive effect of Chinese investment in the US is the increase in trade between the two countries. Chinese companies investing in the US are often looking to export goods to China. This has helped to increase exports from the US to China and has helped to reduce the US trade deficit with China.

Negative Effects on the US Economy

While there have been some positive effects of Chinese investment in the US, there have also been some negative effects. One of the most significant negative effects has been the impact on US industries. Chinese companies investing in the US have often been accused of taking over US companies and then moving production to China. This has led to job losses in the US and has hurt US industries.

Another negative effect of Chinese investment in the US has been the impact on US national security. Chinese companies investing in the US have been accused of stealing US technology and intellectual property. This has raised concerns about the ability of Chinese companies to gain access to sensitive US technology and information.

Impact on US National Security

Chinese investment in the US has raised concerns about US national security. Chinese companies investing in the US have been accused of stealing US technology and intellectual property. This has raised concerns about the ability of Chinese companies to gain access to sensitive US technology and information.

In addition to concerns about technology theft, Chinese investment in the US has raised concerns about the potential for Chinese companies to gain control of US infrastructure. Chinese companies have invested in US ports and elements of critical infrastructure including energy companies This has raised concerns about the ability of China to disrupt US infrastructure in the event of a conflict.

Overall, Chinese investment in the US has had both positive and negative effects on the US economy and US national security. While Chinese investment has created jobs and increased trade between the two countries, it has also hurt US industries and raised concerns about US national security.

Controversies Surrounding Chinese Investment in the US

National Security Concerns

One of the biggest controversies surrounding Chinese investment in the US is national security concerns. There are fears that China's acquisition of US companies and land could give them access to sensitive information and technology. Chinese companies have been accused of stealing trade secrets and intellectual property and there are concerns that they could use their acquisitions to spy on the US.

The US government has taken steps to address these concerns. President Trump signed the Foreign Investment Risk Review Modernization Act which expanded the authority of the Committee on Foreign Investment in the United States to review foreign investments in US companies. The CFIUS can now review transactions that involve the acquisition of real estate near sensitive military installations and other critical infrastructure.