China’s Purchases of U.S. Land Stoke Bipartisan Panic, Just Like Japan’s Did In the 1980s

“Buy land,” says the old investment axiom. “They’re not making any more of it.” And yet, depending on which country you come from, some U.S. lawmakers would deny you the right.

Between 2009 and 2016, China’s global expenditures on agricultural land increased more than tenfold, according to data cited by the U.S. Department of Agriculture (USDA). Increasingly, both Republicans and Democrats agree this is a serious problem requiring a legislative solution.

Texas state Sen. Lois Kolkhorst (R–Brenham) introduced a bill that would bar any “citizen of China, Iran, North Korea, or Russia” from buying property in the state. While Kolkhorst said the bill would not apply to American citizens or lawful permanent residents, the bill’s text made no such distinction. (She later modified the bill to make an exception for U.S. citizens and permanent residents and to exempt home purchases.) Gov. Greg Abbott indicated he would sign the bill if passed.

In January, Florida Gov. Ron DeSantis said he was also considering a ban on Chinese investors or companies purchasing property in the state.

Kolkhorst, Abbott, and DeSantis are all Republicans, but this issue has support across the aisle: While running for governor of Georgia in 2022 against incumbent Brian Kemp, Democrat Stacey Abrams told Fox News that Kemp was “placing farmland in the state of Georgia in the hands of, basically, a nation that has proven itself to be a national security threat,” referencing China. Abrams dinged Kemp for a state-funded website that encouraged Chinese investment in Georgia.

In January, Sens. Jon Tester (D–Mont.) and Mike Rounds (R–S.D.) introduced a bill, the Promoting Agriculture Safeguards and Security (PASS) Act, “aimed at preventing China, Russia, Iran and North Korea from investing in, purchasing, leasing or otherwise acquiring U.S. farmland.” Reps. Elise Stefanik (R–N.Y.) and Rick Crawford (R–Ark.) introduced a bill of the same name last year.

The Committee on Foreign Investment in the United States (CFIUS), an interagency assemblage, reviews certain foreign purchases of U.S. properties and has the power to block any it disapproves of. The PASS Act would add the secretaries of the Department of Agriculture and the Department of Health and Human Services to the CFIUS in order to approve or deny agricultural purchases.

Tester said he would not “let our foreign adversaries weaken our national security by buying up American farmland,” with Rounds adding that the bill would ensure that “American interests are protected by blacklisting foreign adversaries from purchasing land or businesses involved in agriculture.” (Representatives in Tester’s and Rounds’ offices did not respond to Reason‘s requests for comment on why Chinese purchases of agricultural land constituted national security risks.)

But the bills are driven by an overblown panic.

For one thing, despite the recent ramp-up, China’s share of American land is quite small. In 2021, the USDA’s Farm Service Agency reported that foreign investors own around 40 million acres, which constitutes just over 3 percent of all privately held agricultural land. Of all foreign-owned land in the U.S., China’s share comprised around 384,000 acres—0.9 percent of the total. In fact, on