A uniquely strong tradition of individual liberty — instantiated in everything from free speech to free association — has always been America’s greatest strength. But in conflict with an authoritarian country, liberty also presents a significant surface area for attack. For example, in the case of risk from China, our relatively free market has enabled a hostile, authoritarian foreign power to set about literally purchasing vital American industry and resources.

I’m not yet prepared to sacrifice our freedoms conceptually, and I don’t agree every single act of business with China should be considered suspiciously, let alone prohibited. But I do think there’s value in stepping back, and taking in the degree to which the CCP has set to dominating our country one purchase at a time.

Matthew Foldi guests for Pirate Wires with the birds-eye view.

-Solana

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China’s spy balloons thrust the country’s adversarial relationship with the United States back into the spotlight, but airborne espionage isn’t the only way the communist nation is leveraging the openness of American society to its advantage.

Across the world, China is implementing its Belt and Road Initiative, which allows it to take advantage of developing countries by luring them into deals that seem too good to be true — because with China, there is always fine print, from how it plunders copper mines in Africa to how its Confucius Institutes in America offer free Chinese instruction in exchange for Beijing-approved curricula. More recently, China’s attempts, both successful and stymied, to purchase key areas of America’s supply chain suggest America is becoming another country in which China is trying to implement its Belt and Road-style policies, ranging from purchasing the military academy Donald Trump attended to spying on the nation’s capital city, and everything in between.

As if the coronavirus pandemic wasn’t enough to demonstrate the risks of relying on Chinese-anchored supply chains, in some cases, it’s too late to make adjustments or change course. To kick things off, firms directly tied to the Chinese Communist Party (CCP) bought the military academy attended by former president Donald Trump, which has a Junior ROTC program; these programs are designed to shape the future leaders of our military. The Washington Free Beacon reported that “in 2015, a member of the Chinese People's Political Consultative Conference (CPPCC), which serves as the Chinese Communist Party's political advisory board, purchased Donald Trump's alma mater, the New York Military Academy, for $16 million dollars. Conference member Mo Tianquan secured the purchase after a bidding war with another Chinese conglomerate.”

The People’s Daily, a Chinese state-owned propaganda outlet, celebrated Mo’s purchase. “It is reported that the investors are intending to have the school, whose graduates include Donald Trump, remain as a high school,” it wrote. Mo does more than just pay lip service to the CCP; he’s said he was "very honored" to be in the CPPCC, which he confirmed works “under the leadership of the Communist Party of China.” Mo hasn’t hesitated in putting his Chinese business partners on the military academy’s board of trustees either, the Free Beacon reported. 

It’s not just Trump’s alma mater that CCP-connected individuals have purchased in America. Beyond the New York Military Academy, CCP-tied entities have also purchased the Florida Preparatory Academy in Melbourne, Florida which is owned by a subsidiary of the Chongqing-based Newopen Group; its chairman has participated in the Chinese Entrepreneurs Association, which is sponsored by the CCP. Like Trump’s alma mater, the Florida Preparatory Academy has a JROTC program.

While China buying up American military academies should be a major red flag for our future military preparedness, we don’t know just how deep the problem of CCP ownership of junior military academies goes. Rep. Mike Waltz has a short term solution to the problem of CCP-tied businesses buying Junior ROTC programs, which is to first figure out how many they’ve acquired. Last month, Waltz wrote to Defense Secretary Lloyd Austin requesting an audit of all Junior ROTC programs at private schools to see “whether those schools are owned by a subsidiary of a foreign company, and the name of the subsidiary of a foreign company.”

Turning from military academies to Congress, one of the few “must pass” bills this year is the annual Farm Bill. A question that lawmakers will have to confront is how to address China buying up American farmland. A pair of Republicans from Washington State, Reps. Cathy McMorris-Rodgers and Dan Newhouse, introduced legislation that would do just that.

The Prohibition of Agricultural Land for the People’s Republic of China Act would “prohibit the purchase of public or private agricultural land in the United States by foreign nationals associated with the Government of the People’s Republic of China.” However, it is not yet law.

While the McMorris-Newhouse bill waits for final passage, which supporters say is likely in the House, there have been other ways that China’s purchases have been forcibly halted, albeit on a more case-by-case basis.

In 2021, a Chinese company, called Fufeng Group, bought 300 acres of land for just over $2 million in Grand Forks, North Dakota, with plans to pump in another $700 million to open up a corn mill. This huge cash and jobs infusion into a small town sounds too good to be true, right?

That’s exactly the case — it is too good to be true, and bipartisan concerns ground Fufeng’s plans to a halt. The main reason? The large swath of land the Chinese company bought is conveniently located just 12 miles from a U.S. Air Force base housing top secret drone technology, and key components of both our early warning and detection network for ballistic missile threats and threats coming from space. 

Both of North Dakota’s Republican senators, John Hoeven and Kevin Cramer, forcefully opposed the purchase. Hoeven’s office released a letter written to him by Air Force Assistant Secretary Andrew Hunter, in which Hunter said that this deal is unacceptable on grounds of national security. “The Department’s view is unambiguous: the proposed project presents a significant threat to national security with both near- and long-term risks of significant impacts to our operations in the area,” Hunter wrote.

This concern was echoed by Ross Kennedy, a security and supply chain expert, who laid out how China planned to pillage North Dakota’s corn in an article fittingly titled “Belt and Road Comes to the Heartland: The Peculiar Story of Fufeng Group and Grand Forks.” 

In his piece, Kennedy laid out two particularly interesting claims: one, that the CEO of Fufeng is a bona fide CCP member, and two, that the deal wouldn’t have been worth making for the American side, even were it not for national security concerns.

Per Kenendy’s reporting:

Founder and Chairman of the Board [of Fufeng Group], Li Xuechun, served as deputy to the Shandong Province 12th People’s Congress starting in 2003 while also being named as the ‘Model Labour’ of the province in the same year. Fufeng itself further exists as a vector of CCP policy. In remarks delivered to the 16th People’s Congress of Qiqihar on 26 December 2017, Mayor Li Yugang emphasized the Party’s role in building and operationalizing Fufeng’s wet corn mill in less than a year, while reinforcing the Party’s commitment to ‘accelerate’ Fufeng’s plans to expand production capacity of amino acids at the plant to consumer more than 3 million metric tons per year of corn. In his annual report issued on 7 January 2020, Mayor Li reiterated that Fufeng is a ‘national key leading enterprise’ in ensuring food security for China.

Even if the Fufeng plant weren’t spitting distance from an Air Force base, Kennedy’s reporting argues that making deals like these with China are still suspect, because the terms will always skew towards China. “One might wonder if Fufeng Group’s founder and chairman, Li Xuechun, shared with the North Dakota luminaries his intention to convert most of the plant’s production to export sales no later than 2025, only a few months after anticipated conclusion of the plant’s buildout?” Kennedy wrote.

Beyond the national security ramifications, the fine print of the deal suggests that China now views America the same way that it views much of the Third World: as a resource-rich country whose leaders are so stupid they’ll sign any deal that looks good in the short term, regardless of how awful the long term consequences may be. This is, in essence, what China’s Belt and Road Initiative is all about. And North Dakota was smack dab in the middle of it, until Grand Forks said hell no, leaving Fufeng with hundreds of acres, but no permits to build.

“They have the land, but they have no ability to build anything on it,” Grand Forks Mayor Brandon Bochenski said.

To Armstrong, the wildly different economic systems between America and China help explain why China is able to dump millions of dollars into American coffers, like how it does in its Belt and Road Initiatives around the world. “The reason an American company is not building the milling facility in North Dakota is because they don't get their rate of return and they can't finance it. The regulatory regime and the way in which it works is American companies don't see the economic benefit of doing that because they're running on pure capitalistic metrics. China doesn't care if they get their cash flow in three-and-a-half years and their rate of return starts coming back in seven years.”

What China unsuccessfully tried to do in North Dakota is similar to what it does across Africa and other developing regions. “It’s a canny strategic maneuver, and as is unfortunately typical of our political leadership, the short-term promise of profits, fundraising, and (perhaps) future jobs is a leash with which Chinese companies manipulate their American running dogs,” Kennedy wrote, describing the Grand Forks plan. He might as well have been describing the strategy that China used to hijack Uganda’s international airport, Sri Lanka’s largest port, and Zambia’s copper production. 

Fufeng’s ultimate failures to convince North Dakotans (after initially looking primed for success) are illustrative in another case where a company closely tied to the CCP looks to have found fertile ground in Marshall, Michigan. Ford, the legendary American automaker, had planned to team up with ​​Contemporary Amperex Technology (CATL), a Chinese electric battery company.

Prior to settling on Marshall, CATL originally planned to build its plant in Virginia, until Republican Governor Glenn Youngkin nixed the deal, citing national security concerns. “I would have loved to have had Ford come to Virginia and build a battery plant if they were not using it as a front for a company that is controlled by the Chinese Communist Party,” he said.

Ford claims that once the plant is completed, CATL’s role will be limited to licensing its lithium iron phosphate battery technology. That’s not enough for Youngkin, who said that “all they have done is continue to massage the messaging around the fact that the technology at the heart of this battery is from Chinese Communist Party-influenced CATL.” Youngkin had nothing kind to say about Ford; the governor said that China is “manipulating Ford to do something to get access to this market and that is what’s wrong.”

Undeterred, Ford looked elsewhere for a location it could set up shop. Michigan’s governor, Democrat Gretchen Whitmer, who steadfastly refuses to delete her TikTok account even though she acknowledges the privacy concerns that stem from using an app widely derided as Chinese spyware, leaped at the opportunity to bring the plant to Michigan.

Awkwardly for Whitmer, just days after the deal was announced, Fox News reported that CATL’s CEO is closely tied to the CCP and its global “United Front” propaganda arm. Zeng Yuqun, CATL’s founder, “was identified last year as a member of the Chinese People's Political Consultative Conference (CPPCC) National Committee,” Fox reported. 

China hawks like the American Foreign Policy Council’s Michael Sobolik call the CPPCC a “fig leaf” used to mask ties to the CCP. "The Chinese Communist Party uses the Chinese People’s Political Consultative Conference as a sham,” Sobolik told Fox. “It is neither consultative, nor is it about the Chinese people. The CCP uses the CPPCC to rubber-stamp the Party agenda, and hides behind the organization’s diverse membership. It’s a fig leaf of an organization — but it does play a substantive role when it comes to ‘United Front’ work.”

Rep. Tim Walberg, the Republican who represents the Michigan area in Congress, was not informed by either Whitmer’s office or by Ford prior to the electric battery plant announcement going public. Now, Walberg has to walk the same line that Youngkin in Virginia and Hoeven in North Dakota successfully navigated: explaining that the short-term benefits of securing what looks like a good deal will be vastly outweighed by the hidden costs and clauses that are inherent in doing any business with the CCP, which has a lengthy track record of stealing IP to the tune of hundreds of billions of dollars every year. One study estimates that the value of pirated software, stolen trade secrets, and counterfeiting by China costs American businesses up to $600 billion a year. 

One of the lines that policymakers like Walberg have to walk is how to explain that the short-term benefits of jobs coming to his area are actually outweighed by national security concerns. “Having 2,500 jobs come to the Marshall community is good news and reflects a local emphasis and long-term strategy on creating conditions ripe for investment,” he told me. “However, it is concerning to have a Chinese battery manufacturer, especially in light of recent provocations. We need to emphasize strengthening our economy without increasing dependency on China and I have significant concerns regarding the arrangement with CATL.”

Walberg is not alone in voicing concerns about CATL’s ties to the CCP. Sen. Marco Rubio wrote to Transportation Secretary Pete Buttigieg, Treasury Secretary Janet Yellen, and Energy Secretary Jennifer Granholm, calling for an immediate review of the licensing agreement between Ford and CATL. “This deal will only deepen U.S. reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits,” Rubio wrote.

One of the battles Walberg has been waging on behalf of job creators in his district is to ward off a series of lawsuits by activists targeting the Canadian Line 5 pipeline, which — if successful — would kill 34,000 jobs across the Midwest, according to estimations from the Consumer Energy Alliance (CEA). In contrast with China’s global track record of false promises, Canada has been offering help to make the pipeline work with no strings attached, and in the process keep thousands of Americans employed. However, lawmakers like Walberg are frustrated by Whitmer’s willingness to embrace deals with CCP-tied entities while simultaneously fighting against Canada on Line 5.

Whitmer isn’t alone in being fooled by the CCP. In 2017 Washington, D.C, leaders celebrated plans for China to spend roughly $100 million on a massive Chinese garden in the National Arboretum, located two miles from the Capitol. The proposal, which included plans for a 70-foot tall pagoda that would have direct line of sight to almost everything in D.C., conveniently required that the edifices be constructed with materials shipped in diplomatic pouches, which can’t be inspected upon arrival. 

However, unlike the CCP-tied plant in Michigan, the possible CCP spyware in our nation’s capital was quietly nixed by the FBI last year. 

Looking to the future, Rep. Armstrong told me that American policymakers had “better look long and hard” at the fine print in deals with China to ensure that America doesn’t get locked into contracts we can never fulfill. We have seen China expropriate seaports, airports, and mines from developing countries who were unable to pay off their debts to the CCP and its Belt and Road overmasters. We don’t need that coming to America.

-Matthew Foldi