Can american companies invest in agriculture in china


The United States will remain the dominant supplier of China’s agricultural imports because it is such a large and efficient supplier. However, U.S. farmers and leaders in industries and governments should be aware of the potential opportunities and competition that may arise from Chinese investment. Posted on 04/12/15


Why is China investing in Foreign Agriculture?

USDA reported in 2018 that China’s agricultural investments in other nations had grown more than tenfold since 2009. The Communist Party has actively supported investments in foreign agriculture as part of its “One Belt One Road” economic development plans, aiming to control a greater piece of China’s food supply chain.

How big is China’s Agricultural Investment in the United States?

The biggest Chinese agricultural investment in the U.S. came in 2013, when the Bank facilitated the largest acquisition of an American company to date: the $4.7 billion purchase of Smithfield Foods, the world’s biggest pork producer, by the Shuanghui Group.

Is China buying up American farms?

China is buying up American farms. Washington wants to crack down. Bipartisan pressure is building to stop foreign nationals from purchasing American farm operations and receiving taxpayer…

Can America allow China to control our food supply?

“America cannot allow China to control our food supply,” Pence said Wednesday during a speech at the conservative Heritage Foundation, urging President Joe Biden and Congress to “end all farm subsidies for land owned by foreign nationals.”


How much of U.S. agriculture is owned by China?

The most recent data collected under the Agricultural Foreign Investment Disclosure Act (AFIDA) shows Chinese investors held a little more than half of 1% of the overall 35.8 million acres of U.S. farmland and forest land under foreign ownership in 2019.

Does China own American farmland?

At the turn of this century, Chinese owners owned about 192,000 acres of farmland in the U.S., according to the USDA. By 2019, the USDA says foreign ownership of U.S. acres exceeded 35.2 million acres, a 60 percent increase from the decade prior.

How much of the United States is owned by China?

As of October 2021, the Asian nation owns $1.065 trillion, or about 3.68%, of the $28.9 trillion U.S. national debt, which is more than any other foreign country except Japan.

Why is China buying U.S. farmland?

0:395:14Why is China buying US farmland? Morgan Ortagus explains – YouTubeYouTubeStart of suggested clipEnd of suggested clipThey are looking for where can we meet our energy demands. And where can we meet our food securityMoreThey are looking for where can we meet our energy demands. And where can we meet our food security demands for all these people.

What U.S. companies are owned by the Chinese?

American Companies You Didn’t Know Were Owned By Chinese InvestorsAMC. Popular cinema company AMC, short for American Multi-Cinema, has been around for over a century and is headquartered in Leawood, KS. … General Motors. … Spotify. … Snapchat. … Hilton Hotels. … General Electric Appliance Division. … 48 Comments.

Does China own America?

For its part, China owned 191,000 acres worth $1.9 billion as of 2019. This might not sound like a lot, but Chinese ownership of American farmland has exploded dramatically over the last decade. Indeed, there has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade.

Does China own Walmart stores?

The Walton family owns and controls Walmart and its operations. Sam Walton founded it as Walmart Discount City in 1962, Bentonville, Arkansas. Thus, it is clear that Walmart is not owned by China or the Chinese.

What if U.S. defaults on debt to China?

If it were to call in its debt, U.S. interest rates and prices could rise, slowing U.S. economic growth. On the other hand, if China were to call in its debt, the demand for the dollar could plummet. This dollar collapse could disrupt international markets even more than the 2008 financial crisis.

Is Google owned by the Chinese?

By November 2013, Google’s search market share in China had declined to 1.7% from its August 2009 level of 36.2%, though it has slowly risen since, representing 3.8% of the search engine market by July 2020….Google China.Type of siteSearch engineFounded12 April 2006HeadquartersBeijing , ChinaArea servedChinaParentGoogle3 more rows

What foreign country owns the most land in the United States?

CanadaCanada is the biggest foreign owner of U.S. agricultural and timber land, and owns 4.7 million acres in the United States. The Netherlands is the second largest foreign owner with 4.6 million acres.

Who owns the most farmland in the USA?

Bill GatesWith almost 269,000 acres, Bill Gates retained his ranking as America’s largest private farmland owner.

Is Hawaii owned by China?

The U.S. Federal Government. While much of this land was transferred to the new state of Hawaii in 1959, the federal government did keep some.

Why is China investing in agriculture?

The surge of agricultural investment reflects an alignment of interests between Chinese companies and political leaders as China’s imports of agricultural products grow. The Ministry of Agriculture reported that agricultural imports exceeded $125 billion for 2017, up from $41 billion 10 years earlier. The growth reflects greater import volume of particular commodities like soybeans and pork as well as a broadening menu of imported commodities. Chinese consumers’ escalating demand for product variety—from staples like rice and wheat to premium products like olive oil and infant formula—stimulates commercial investments in land, brand names, and technology aimed at profiting from market growth. At the same time, the Chinese Government seeks to steer investors toward ventures that achieve national goals by offering various incentives, arranging deals, and setting up strategic plans.

How does China affect agriculture?

China’s investments are likely to have impacts on global agricultural trade, just as a similar stream of Japanese investments did in earlier decades. Japanese companies played a role in Brazil’s emergence as a soybean exporter and China’s rise as an exporter of vegetables and poultry. Japanese agricultural trading companies have a prominent role in sourcing grains and oilseeds. There were concerns that Japan’s agricultural and food investment during the 1970s and ‘80s were a threat to U.S. agriculture. However, the United States remains the leading supplier of Japan’s agricultural imports, and Japan’s ownership of U.S. farmland and agribusiness remains modest.

What companies did China buy?

These include ChemChina’s $43-billion acquisition of Syngenta, a Swiss farm chemical and seed company, Shuanghui International’s purchase of U.S.-based Smithfield Foods, and China National Cereals, Oils and Foodstuffs Corporation’s (COFCO) purchase of two major agricultural trading companies—Noble Agri and Nidera. Chinese companies have also acquired companies or formed joint ventures in New Zealand and Australia, focused on meeting China’s growing demand for dairy, beef, and lamb.

What are the Chinese investments in Southeast Asia?

An initial wave of investments during 2004-12 was focused mainly on crop production, fishing ventures, and acquiring raw materials for the Chinese market. Most such ventures have targeted eastern Russia and neighboring Asian countries, attracted by relatively cheap, underutilized land. Chinese investments in Southeast Asia have focused on tropical crops like palm oil, cassava, sugar, fruit, and lumber, prompted by strong domestic demand and a regional free trade agreement with the Association of South East Asian Nations (ASEAN). Asia accounts for about half of China’s foreign investment in agriculture, forestry, and fishing.

Why is China’s two markets two kinds of resources?

Their “two markets, two kinds of resources” strategy calls for China’s demand for agricultural commodities to be met by a combination of domestic and foreign supplies. The strategy encourages Chinese companies to engage in each link of the supply chain for imported commodities to earn profits and gain influence over prices.

What are the factors that influence China’s agricultural imports?

China’s investments may influence patterns of trade at the margins, but resource scarcity, production capabilities, commodity prices, exchange rates, and other fundamentals will remain the dominant factors in the country’s growing agricultural imports.

What is China’s aspiration to be a leader in international technical cooperation?

China’s aspiration to be a leader in international technical cooperation is reflected by an instruction to build agricultural technology parks overseas, issued in 2015. Early examples have been constructed in Tanzania and eastern Russia. Many projects associated with these initiatives appear to function both as foreign aid projects and as ventures giving Chinese companies access to agricultural raw materials.

How many farms did China buy in 2007?

Records from the Agricultural Foreign Investment Disclosure Act show that Chinese acquisitions “rose from less than 10 annually” before 2008 to “12 to 25 each year during 2008-13.” In 2007, China bought six farms, all in California. The next year, they had bought 30 outside California, in Arizona, Texas and Missouri.

What is CFIUS in agriculture?

One potential remedy is to include agriculture in the scope of work covered by the Committee on Foreign Investment in the United States (CFIUS), the intra-agency body that vets the risks posed by foreign investments to U.S. national security, or lawmakers may decide on a different fix. Whatever the specifics, the congressional advocates have it right: if American landowners are to remain competitive, Washington needs greater resources to investigate foreign purchases of farmland that exploit existing loopholes. And those loopholes, once identified, need to be closed.

What is the CCP food security initiative?

This strategy, outlined in an official Chinese Communist Party (CCP) 2013 food security initiative, encourages Chinese companies to gain greater control over agricultural supply chain imports. Moreover, Beijing has backed up this priority financially, utilizing its assorted state-connected financial institutions. The Agricultural Bank of China has stressed that it has “fully met the financial needs of the ‘Going Global’ of enterprises in agricultural cooperation.”

Is China controlling the food supply?

These acquisitions, and other smaller ones, highlight that China is slowly but surely gaining control of parts of the American food supply . The effects are likely to be pronounced, on several levels.

Does the USDA monitor foreign ownership?

Unfortunately, the Department of Agriculture has failed to properly assess the impact of foreign ownership of farmland. Since 2011, only 10 fines worth a measly $115,754 have been assessed by the USDA. This is not for lack of trying. Not only does USDA lack the staff and resources to monitor foreign ownership, but it relies heavily on companies to self-report correct filings. When companies don’t, tracing back the correct finances becomes burdensome.

What amendment would block Chinese farms from tapping federal support programs?

The committee unexpectedly adopted Newhouse’s amendment to the Agriculture-FDA spending bill (H.R. 4356 (117)) that would block any new agricultural purchases by companies that are wholly or partly controlled by the Chinese government and bar Chinese-owned farms from tapping federal support programs.

Which states have restrictions on foreign ownership of farmland?

A few states, including top agricultural centers like Iowa and Minnesota, already have varying restrictions on foreign ownership of their farmland. As a presidential candidate in 2019, Warren said she would support a national version of Iowa’s law along with safeguards against foreign investors using “fake American buyers” to circumvent the rules.

Which state has the most foreign land?

While some states have strict laws in place, others are more open to foreign investments. Texas has the largest amount of foreign-held agricultural land, at 4.4 million acres, followed by Maine and Alabama, according to USDA.

Does the USDA understate foreign control?

Those seeking more restrictions say USDA’s numbers actually understate the amount of foreign control over American ag operations. The data is based on a 1978 law directing foreign nationals to report their U.S. agricultural holdings to USDA — a requirement that can be difficult for the department to enforce.

What is China’s agricultural industry?

Currently, the agricultural industry in China is responsible for producing 18% of the world’s cereal grains, 29% of the worlds meat, and 50% of the world’s vegetables. Overal, the country is responsible for creating roughly 20% of the world’s food, making it the largest agricultural economy globally.

What are the recent developments in agriculture in China?

Recent Developments in the Agricultural Industry in China. Agriculture remained a core part of the 12th and 13th Five-Year Plans of the Chinese government. Aside from focussing on quotas for grain and other staples, the five-year plans point to trends that will benefit the farming class in the future.

How does Sichuan earn its income?

The majority of the 81 million residents of Sichuan province earn their income through involvement in the agriculture and cultivation industries. Sichuan’s ability to grow a diversity of crops has made it a modern agricultural hub. The province currently exports most of what is produced. The Sichuan province is located in China’s mountainous …

Why is it important to import agricultural technology to China?

If your company would like to import agricultural technology to China, it is important to create a strategy in order to protect your company’s intellectual property and tap into the relevant local distribution channels that will allow you to be successful.

Why are large scale farms important?

Through the robust development of farmers’ cooperatives, large scale farms could replace the decentralized, smaller farm system and allow for more significant growth.

What is China’s food production?

Currently, China ranks first in the world in terms of the production of cereals, cotton, fruits, vegetables, meat, poultry, eggs and fish.

Where is Sichuan province located?

The Sichuan province is located in China’s mountainous Southwest region and borders Qinghai, Yunnan, Tibet, and Chongqing regions of China. This area is marked by diversity and modern investment in continued development. Sichuan province’s capital city of Chengdu was elevated …

Who said America cannot allow China to control our food supply?

In a speech last week for the conservative Heritage Foundation, Republican former Vice President Mike Pence said, “America cannot allow China to control our food supply.” During his speech, Pence called on President Joe Biden to “end all farm subsidies for land owned by foreign nationals.”

How much land does China own in 2020?

As of the start of 2020, Chinese investors owned about 192,000 acres of U.S. agricultural land valued at about $1.9 billion, according to Politico. While Chinese land ownership in the U.S. is less than that of other foreign nations, the growth in Chinese land ownership is part of an overall trend in China rapidly buying up other country’s farmland over more than a decade.

Which states have laws limiting foreign ownership of farmland?

Both Iowa and Minnesota have already passed state laws, imposing restrictions on foreign ownership of farmland in their states. In 2019, ahead of the Democrat presidential primaries, then-candidate Warren said she would support a national version of Iowa’s law and further safeguards against foreign investors buying farmland through “fake American buyers” to circumvent land purchase rules.

Can foreign investors set up LLCs?

Joe Maxwell, president of the progressive advocacy group Family Farm Action, told Politico that foreign investors could likely still set up limited liability companies (LLCs) in the U.S. and designate an American owner to circumvent reporting requirements while still owning the U.S. agricultural land through their corporate structure. Sifting through layered corporate structures could prove time-consuming and labor-intensive for regulatory agencies.

Did Maxwell warn foreign investors to bid higher for farmland?

Maxwell also warned foreign investors could start bidding much higher prices for U.S. farmland up for auction, pricing out prospective new U.S. farmers.

How many farms did China have in 1978?

The reforms of 1978 transferred responsibility for production to the farmers, but without giving them any land ownership rights. China has 200 million farms covering an average of a mere 0.6 hectares each. Investments in rural infrastructure and a high literacy rate both contributed to the success of the first reforms.

When did China start providing food aid to Africa?

15 Chinese Aid: Evolution through Continuity. China began its support to agriculture in Africa when it offered food aid to Guinea in 1959. Since that time, Sino-African cooperation in agriculture has gone through three stages, characterized by overall continuity from a project-oriented approach to a more institutionalized approach.

What is the priority of the Chinese government?

The Chinese government has placed priority on agro-industrial projects in subsistence farming, aquaculture, and farming implements. In 2007, the China-Africa Development Fund was created to support Chinese investments in Africa.

What are the changes in China’s demand?

Over the course of the past 10 years, the most significant changes have been the increased consumption of meat, fruit, vegetables, and dairy products and a decrease in cereal consumption.

What are the main trade partners for China?

While Chinese imports have become highly concentrated, its exports have been diversified. The main trade partners for Chinese agriculture are Asia and NAFTA for exports, and Asia and South America for imports. Africa plays a minor role in terms of both Chinese imports and exports of agricultural goods.

Which country has the most arable land?

A Brief Introduction to Chinese and African Agriculture. China is the third largest country in the world after Russia and Canada. With arable land of just 122 million hectares (8% of the total surface of the planet), China feeds 20% of the world’s population.

Will China import cereals?

However, China might for economic reasons elect to import a portion of its cereal requirements. According to Zhao, China’s self-sufficiency ratio could attain 95% in 2030, with China importing 30 to 35 million tons of cereals. As Zhao comments, 11.

Why is China a risky investment?

While investing in volatile emerging markets is inherently unpredictable, China is unique in not only its unprecedented allocation within international equity funds but also because of the serious concerns expressed by American policymakers about its political and economic system . The risks include the timing, coming as it does right as U.S. foreign and commercial policy galvanizes to contain China; the possibility of interference from Beijing, given that most listed Chinese companies involve a degree of state control; the potential imposition of capital controls, where investors may be denied the ability to extract their investments; the impact of U.S. sanctions on individual companies; and finally, the reputational risk from Chinese companies that have low ratings on the environment, on social factors, and governance. In other words, while China would otherwise face substantial pressure on its capital account, investment shifts that are virtually on autopilot from Americans and other global investors will materially contribute to relieving those pressures.

How much will China invest in 2022?

The International Monetary Fund (IMF) estimates $300 billion in increased index-driven bond investments in China by 2022. Put together, the newly increased portfolio investments in China—and the prospects of further increases—have a tremendous impact that essentially contradicts current U.S. government policy.

Why did TSP reverse its decision to include emerging markets?

Jeanne Shaheen and Marco Rubio urged the administrator of the federal Thrift Savings Plan (TSP), the largest retirement plan in the United States, to reverse its decision to include emerging markets—because of the exposure to Chinese equities —in its benchmark.

What percentage of Americans own stocks?

Surveys show that 55 percent of Americans own stocks, mostly relying on professionally managed pension funds, mutual funds, or exchange-traded funds (ETFs) to run their current investments and retirement accounts. Among those investments, a substantial 20 percent or more is generally allocated to international equities, usually in a mix of both developed and emerging markets. But while it is well known that both actively managed and index-based funds have global allocations, one trend that has developed under the radar is the fact that the weight of Chinese companies within emerging market allocations has grown dramatically in the last year, partly because of technical changes made by the three major index providers—MSCI, FTSE Russell, and S&P Dow Jones.

When will China’s weight in emerging market indexes rise?

When these added allocations are enacted, China’s projected weight in emerging market indexes will rise toward 40 percent or more by the end of 2022. This added exposure to China will have knock-on effects. Other international equity indexes, which follow the allocations of popular emerging market indexes, and into which many American pension funds …

Is China a dominant country in emerging markets?

Even though the dominance of a single country—China—in emerging markets is unprecedented, this is not the first time that investors have felt the need to take steps to reduce the weight of a market or even remove a market from their portfolios. We need only look back to the 1980s, when institutional investors successfully solved two thorny issues.

Does China face pressure on its capital account?

In other words, while China would otherwise face substantial pressure on its capital account, investment shifts that are virtually on autopilot from Americans and other global investors will materially contribute to relieving those pressures. Of course, all forms of investment entail risks.


China’s Strategic Considerations as An Agricultural Importer

The surge of agricultural investment reflects an alignment of interests between Chinese companies and political leaders as China’s imports of agricultural products grow. The Ministry of Agriculture reported that agricultural imports exceeded $125 billion for 2017, up from $41 billion 10 years earlier. The growth re…

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Many of China’s Investments Fall Short of Expectations

  • Rapid growth in investment does not necessarily mean success. Many of China’s overseas investments never reach their intended scale, and quite a few have been abandoned. While a handful of prominent ventures and acquisitions have benefited from bank loans or deals negotiated by political leaders, surveys by Chinese scholars have found that most overseas agri…

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More Growth on The Horizon?

  • While China’s spending on foreign agricultural ventures appears large, it is modest compared with the country’s agricultural imports: In 2016, the country’s foreign agricultural investment equaled just 3 percent of the value of its agricultural imports that year. Moreover, agricultural investment has lagged behind other sectors in China’s foreign investment surge. Agriculture, forestry, and fi…

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