In this modern day of growing global enterprise and market competition there is concern for U.S. agriculture — and other types of U.S. industries — that the pressures brought by foreign companies and the advantages they have in terms of lower input and labor costs could one day tip the delicate balance and cause a financial crisis for our nation.
Indeed, in recent years we have seen a spike in interest by foreign investors and foreign-owned corporations who have, in many instances, expanded or migrated their business and industry efforts to U.S. soil and square into the U.S. marketplace.
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Foreign-owned corporations and industry conducting business on U.S. soil — or engaging in business transactions with American companies — offer many advantages in terms of investment capital brought into the marketplace, the creation of jobs for Americans, and tax revenues. But in many instances it can, in the least, complicate an already rigorous and competitive market and make it more difficult for U.S. owned companies and individuals to compete effectively.
Little foreign-owned farmland in U.S.
When it comes to farmland, according to a 2012 USDA study, relatively little U.S. farmland is owned by foreign interests. As of 2009, the latest year for which figures are available, only 1.7 percent of privately owned land in farms or forest, or 22.8 million acres, was owned by foreign interests.
In 2009, most foreign ownership was concentrated in Maine: 15.7 percent of Maine’s privately owned farm land, or 2.82 million acres, was foreign owned. Of this amount, 2.77 million acres were forest land. Other States with relatively high levels of foreign ownership of farm and forest land included Hawaii (8.8 percent), Washington (7.6 percent), Nevada (5.2 percent), and Alabama (5.1 percent). In the 2009 study, foreign interests owned 2.57 million acres in Texas.
While these numbers are extremely low overall, it should be noted that the increase in foreign owned farmland and forest acres rose nearly 30 percent between 2004 and 2009. Also of concern was a report published last year that Beijing has been quietly developing a plan since 2009 that would convert more than $1 trillion of U.S. debt it owns into equity.
According to that report (in the Financial Times), Yu Qiao, a professor of economics in the School of Public Policy and Management at Tsighua University in Beijing, proposed a plan for the U.S. government to guarantee foreign investments in the United States. Under terms of the plan, China would convert many of its holdings of U.S. debt into equity, including investments in U.S. companies and into real estate equity, clearing the way for land ownership on a much larger scale. Concerns have surfaced that this land could include prime U.S. farmland.
China's Louisiana Purchase
The latest development to pique the interest and concerns of skeptics and opponent's of what has been called China's possible land-grabbing scheme is news surfacing out of Louisiana recently over the planned development of a multibillion dollar methanol plant in Saint James Parish, located between New Orleans and Baton Rouge.
The story involves far-ranging questions about many of the individuals coming to the U.S. — in this case Louisiana — with their millions of dollars in investment capital. While unsubstantiated, some fear a few wealthy foreign business tycoons and industry leaders have abandoned their home country, in this case China, to seek opportunity in other countries as a result of a storied past, or as some have suggested, covertly maintain a beneficial and cooperative relationship with the Chinese government that may have an underlying or undiscovered motive.
In the least, it raises questions about the growing problems related to foreign investors and their desire for U.S. opportunities, whether legal, ethical or otherwise. It also raises questions over ethics, especially as it relates to U.S. officials who may be involved in entertaining foreign investment, often without realizing or caring about the consequences.
Such may be the case of the intentions of the prominent Chinese tycoon and politician behind the Saint James Parish methanol plant project. In a published report from an unlikely source, AlJazeera America news, the Chinese media is asking questions about how Wang Jinshu, the Communist Party Secretary for the northeastern Chinese village of Yuhuang and a former delegate to the National People’s Congress, is garnering assistance and promises of an incentive package from Louisiana Gov. Bobby Jindal to construct and operate the methanol plant on Louisiana soil.
Follow the money
According to published reports by multiple Chinese newspapers and by AlJazeera, funds generated by the methanol plant and the "lion's share" of its product may be sent straight back to China, creating a scenario where foreign investors are building plants on U.S. soil that may well provide some benefits in the way of jobs and taxes, but effectively are using their U.S. facilities to develop resources for the Chinese government.
The other question that demands an answer is what are the links between Wang’s U.S. subsidiary — Houston-headquartered Yuhuang Chemical, Inc. — and the Chinese government and the Jindal administration?
Jindal, a conservative and a possible contender for the 2016 Republican Party's
Presidential nomination, has come under fire in at least one newspaper in Louisiana, after Jerald N. Jones, a Baton Rouge lawyer who, according to his website, was "recently reappointed to Louisiana’s Board of Commerce and Industry by Gov. Bobby Jindal after serving as board chairman and vice chairman." He was also appointed by Jindal to the Government and Fiscal Reform Transition Committee. It is interesting to note Jones was listed as a registered agent on Yuhuang Chemical’s Louisiana-based filings.
Yuhuang Chemical’s CEO is Charlie Yao Chaoliang, now a resident of Houston where the company is headquartered. According to published reports, he was president of a registered Louisiana nonprofit, Chinese Professionals Association in New Orleans, one of many such organizations under the umbrella of Houston-based non-profit Chinese Association of Professionals in Science and Technology (CAPST).
According to the AlJazeera report, a book recently published on the organization indicates a number of powerful members of China’s leadership who may have facilitated the transmission of industrial knowledge and expertise gained in foreign markets, like the United States, directly back to China.
In spite of these allegations, Jinshu has long been the target of corruption investigations by the Chinese government, at one time was incarcerated there, and may have left the country to seek opportunities to secure a location for his billions in assets outside of the control of the Chinese government and in a more stable environment.
In a report in the state-run newspaper People’s Daily, Jinshu was credited as being a part of a petrochemical community in Heze, China, that was largely responsible for an environmental tragedy that adversely affected life for local residents. His petrochemical company, Shandong Yuhuang, the largest in Heze, was subsequently heavily fined for serious environmental violations. But the accusation comes from a Chinese government that has also been accused of the very same environmental crimes on a much larger scale.
Benefits versus detriments
Whether Jinshu's plan to construct the methanol plant in Louisiana is a good or bad development depends entirely on perspective. Undoubtedly, many benefits could be realized as millions are pumped into rural economies. Whether the idea of giving up U.S. equity for foreign investments is in the best interest of the nation will, no doubt, be a major point of contention.
As to Jindal's connection or intent as it relates to Jinshu or other Chinese investors who are not only flocking to the Pelican state but are apparently being courted by some state officials, remains a question that will also garner attention and demand answers.
Jindal doesn't stand alone on the issue of how best to bolster state economies and improve life for his constituents. Supporters argue soliciting foreign investments is not only a legal and above-board project, but one that offers enormous opportunities and advantages to the residents of the state.
But like the question of trading U.S. farmland and forest for Chinese investment, how far we go to achieve those goals is an issue that requires debate and close scrutiny as the world, in many ways, becomes smaller in the face of rapid globalization.
You can read Part I of a three part special report about the methanol plant issue from AlJazeera America here.