CFIUS Intervention Needed to Stop Rising Chinese Investments in US Ag, Commission Says
Increasing Chinese investments in U.S. agriculture could reduce China’s need for American exports and give Beijing “undue leverage over U.S. supply chains,” the U.S.-China Economic and Security Review Commission said in a report last week. The U.S. may need to rethink or improve how it uses the Committee on Foreign Investment in the U.S. to better catch those investments, the commission said, which may be harming U.S. economic and national security.
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The commission specifically pointed to China’s rising access to U.S. agricultural intellectual property, which may “erode U.S. competitiveness in agriculture technology.” China is also carrying out “illicit” acquisitions of genetically modified seeds, which could jump-start its development of GM seeds and deprive U.S. companies of revenue.
China’s “weaponization” of GM seeds “poses a threat to U.S. economic and food security,” the report said, especially if GM seed code is used to create a bioweapon. As CFIUS reviews of key agricultural mergers and acquisitions continue, the USDA should provide “critical information regarding trends in China’s agriculture sector” to help the committee assess potentially harmful investments, the report said.
The commission also said Congress may seek to clarify the “involvement” of USDA and other related agencies in CFIUS reviews. Some lawmakers have tried to add the USDA secretary as a permanent CFIUS member (see 2106010003).
The report also suggested CFIUS may need to increase its monitoring of foreign investments in land near “military installations.” As more Chinese investors buy U.S. lands, CFIUS “has an opportunity to safeguard vital military assets,” the report said, adding that any foreign purchase, lease or concession of land near “sensitive government facilities” should be reviewed by the committee.
“The committee has a right to refuse the transaction being considered, but it rarely conducts oversight post hoc,” the report said. “In some cases, threat environments may evolve and create new risks to U.S. defense infrastructures. Periodic reviews, as would be required with a security clearance, for example, could help alleviate national security concerns.”