Access to the U.S. market is a privilege, not a right. Foreign investment in the United States, access to our financial system, and, especially, immigration are regulated by the federal government for a reason: it is not, and should never be, one big free for all.
For example, foreign investment in the United States is generally a good thing. So long as reasonable steps are taken to make sure that U.S. national security and homeland security interests are not harmed, come and invest. However, just because a potential investor has billions to burn, does not necessarily mean U.S. taxpayers should welcome any foreign investor with wide-open arms. We must be picky on who we let in and where they set up operations.
Maybe because I’m one of those Cold War-era babies, I tend to be somewhat suspect of foreign investments originating in or from persons with strong government connections to Communist China. I was two years old when Nixon went to China. Forty-four years later, China is redder than ever. Engagement with Communist China made sense during the Cold War. I’m not so sure it is as important today, notwithstanding the billions in U.S. Treasury notes they supposedly will dump if we sneeze the wrong way.
My not so subtle point is that I’m not conformable with Chinese foreign investment in the United States. I don’t really care how many jobs the experts claim it has generated, some studies say it is a paltry 100,000. China spies on us, a lot. It steals industrial secrets – just this week U.S. authorities announced the arrest of a Chinese spy who stolen highly sensitive source code from IBM. In the Americas, the Chinese are pillaging natural resources and throwing foreign investment around that is undermining regional stability. China is constantly violating international law in South China Sea and, essentially, putting the region in a war footing.
The biggest political crime of all, however, is China’s premeditated devaluation of the U.S. dollar so they, among other things, can make strategic investments in the United States to do even more stealing and spying. According to counter-intelligence professionals, Communist China remains a serial robber of U.S. industrial and military intelligence. It is only a matter of time before a major theft of U.S. technology ends up seriously undermining U.S. interests; and we’ll need a lot more than a Congressional select committee – such as the 1999 Cox Congressional Committee – to clear up and make sense of the mess.
Communist Chinese agents are experts at stealing high-tech and military secrets, but their interests extend far beyond our tanks and computer technology. Earlier this year, the U.S. government warned American farmers to better safeguard genetically modified seeds and farming know-how because of an increasing threat from Chinese espionage rings. There have also been several federal prosecutions of Chinese spies attempting to steal agricultural secrets from American growers. Remember, food security is a part of homeland security. If we fail to safeguard it, well, you can connect the dots.
When a Chinese foreign investor purchased Smithfield Hams in the Tidewater region of Virginia, I was skeptical. On the one hand, the company needed the financial help and the Chinese people are big pork product consumers. However, given the importance of this industry to Virginia as well as overall food security interests of the U.S., why did the Committee on Foreign Investment in the United States (CFIUS) – an inter-agency process created in 1975 to review foreign investments in the U.S. – approve the deal without any conditions?
In this particularly case, I was less concerned that our prime bacon would disappear from store shelves, than I was about the location of the business. From a security standpoint, I think it was a a bad deal for the American taxpayer in 2013, and still believe it so today. From an economic standpoint, the Chinese government did not need the Smithfield investment. The deal was reportedly worth somewhere between $5 to $7 billion. That is a drop in the bucket for the Chinese. It was all about location, location, location.
The Smithfield deal gave the Chinese a unique perch in the Tidewater region of Virginia, home to the largest Naval base in the entire world. There is also a large presence of Air Force, Army, Coast Guard, and Marine personnel in that area. This fact, alone, would have been sufficient grounds in my book for CFIUS to block the Smithfield sale. They’ve done so before. For example, in 2012 CFIUS blocked the purchase of an Oregon wind farm that would’ve been located a little too close to, what a surprise, a Navy base! This was the first time since 1990 that a deal was blocked and a divestment took place on national security grounds.
The next Congress should make it a point of reviewing all foreign investment in the United States as well as the CFIUS review process. They should also consult with counterintelligence experts to ascertain if our lax foreign investment laws are making it easier for China, and other countries, to gain access to the U.S. marketplace and facilitating the wholesale theft of the latest and greatest technologies and innovations.
Just because China and the U.S. have strong economic ties, let’s not delude ourselves. Economic links are only so good for stability and the U.S. should never rely on that slender reed for security matters. China will abandon economics for national security, in a twinkling of an eye, if it is in their interest to do so. The U.S. is enemy number one.
So when it comes to foreign investment by Chinese interests in the U.S., beware of strangers bearing gifts. In some cases, its economic warfare. We need to be more strategic or we’re going to get a whole lot more than we bargained for.