US states are cutting off Chinese citizens and companies from land ownership

State lawmakers are producing a wave of legislation aimed at stopping what they say is a clear and growing danger to national security — land purchases by Chinese citizens and companies.

More than two thirds of states — primarily controlled by Republicans — have enacted or are considering laws limiting or barring foreign ownership of land.

While these laws typically restrict land purchases by multiple countries with hostile U.S. relations, there’s little doubt that China is the main target of these efforts — and that politics are propelling the movement. Restrictions are being enacted across the country — in Texas, Florida and elsewhere, almost exclusively pushed by Republicans — even though there’s little evidence of a credible threat considering Chinese interests currently own a miniscule amount of U.S. territory.

China is “an enemy,” South Dakota Gov. Kristi Noem, a Republican frequently touted as a potential running mate for Donald Trump, told a hearing of the state House Committee on Agriculture last month. “They are buying up our entire food supply chain and when America can’t feed itself and we rely on another country to feed us it becomes a national security issue.”

Last month, Noem signed into law a bill that bars China and five other countries from purchasing farmland in the state.

These restrictions are being wielded as a political cudgel by Republicans in a year where Donald Trump is almost certain to make economic warfare against China a pillar of his presidential campaign and down-ballot contests. In February, the former president threatened to impose tariffs of more than 60 percent on Chinese goods.

They’re just the latest sign that national political currents, when it comes to China, are filtering down to state capitals. Governors of all political stripes have largely shut off trade missions to the communist country, after regularly making the trek to Beijing in the first two decades of this century.

Backers of land purchase restrictions say the federal government is unable or unwilling to protect states from growing threats from Beijing on U.S. soil.

Land purchases “are not being adequately controlled by the federal government, so states are acting on their own,” said Indiana Republican state Rep. Kendell Culp, whose bill to bar farmland purchases by entities linked to five foreign countries passed the state Senate last month and has returned to the House for consideration. That list includes North Korea and Iran, but “concern about China exceeds that of the other four countries,” as a potential risk to the state’s food security, Culp said in an interview.

Over the past year, states have enacted legislation ranging from limits on Chinese student enrollment at universities to removal of Chinese investments from state pension funds. Supporting those efforts are hawkish nonprofit advocacy groups urging state lawmakers to draft and pass legislation to mitigate those risks.

But the biggest focus of state concern about potentially malign Chinese influence has been legislation to block land sales to perceived hostile foreign powers. More than 20 states are in the process of passing new restrictions on foreign land purchases or updating existing laws, according to data from the nonprofit National Agricultural Law Center. That’s after at least 15 states passed laws limiting or barring foreign ownership of land in 2023.

The efforts follow the discovery and subsequent destruction of a Chinese spy balloon over the continental U.S. in February 2023 and a drumbeat of official warnings about Beijing’s national security threat.

U.S. intelligence officials have been increasingly warning of China’s influence operations in the U.S. And a national Marist Poll of 1,455 Americans last month commissioned by the nonprofit advocacy group State Armor — which has been lobbying aggressively for legislation limiting Chinese land purchases — revealed that 73 percent supported banning China or other “adversaries or national security threats” from supplying elements of critical infrastructure, including cell phone towers and electrical grids. 

Political action committees are also weaponizing public concerns about the issue for electoral advantage. The American Dream PAC, which is backing Missouri’s Lt. Gov. Mike Kehoe over Secretary of State Jay Ashcroft in the state’s Republican primary for governor, released an ad last month featuring a Chinese-speaking cow alleging that Ashcroft had supported a law allowing the Chinese Communist Party to purchase Missouri farmland. And in the race for the GOP nomination for departing Rep. Jim Banks’ (R-Ind.) seat, Tim Smith recently dropped an ad in which he pledges to “stop enemies like China from buying up farmland.”

Many Republican lawmakers express growing frustration at what they say is a lack of policing of potentially problematic land purchases by the federal government’s watchdog — the Treasury Department’s Committee on Foreign Investment in the U.S. — or CFIUS.

CFIUS’s regulatory reach for land purchases applies only to areas around “specific airports, maritime ports, or military installations,” which critics say is too narrow to adequately address national security risks.

“The CFIUS process today is largely a rubber stamp. … It is broken very similar to the challenges we have with the federal government that is just not functioning,” said Texas GOP state Sen. Tan Parker, who pioneered states’ moves to address perceived threats from China through his Lone Star Infrastructure Protection Act in 2021. That law blocked GH America Energy, controlled by Chinese billionaire Sun Guangxin, from developing 100,000 acres of land adjacent to Laughlin Air Force Base to create a wind farm.

Arkansas GOP Attorney General Tim Griffin raises similar concerns.

“For years, U.S. intelligence has warned us about the threats our foreign adversaries — particularly China — pose by acquiring our real estate and critical technology, but the federal government has not sufficiently addressed this problem,” said Griffin.

The Treasury Department, which oversees CFIUS, rejects criticism of its limitations. “CFIUS is committed to taking all necessary actions within its authority to safeguard U.S. national security,” said a Treasury spokesperson granted anonymity because they weren’t authorized to speak on the record.

The laws restricting land purchases rely on everything from the State Department’s International Traffic in Arms Regulations’ list of problematic countries to the Commerce Department-designated “foreign adversary” countries, both of which include China. Florida passed a law in July targeted solely at banning “real property and strategic assets by the People’s Republic of China.” That has become a model for similar legislation in other states even though a federal appeals court in February blocked that law for violating Fourteenth Amendment protections against discrimination.

Several states, including Hawaii, Illinois and Iowa, have bills that specifically bar land purchases by Chinese entities. Some of those bills resemble “a copy and paste” of Florida's, said Micah Brown, staff attorney at the nonprofit National Agricultural Law Center and an expert on foreign land ownership.

On Capitol Hill, some lawmakers are grateful that states are leading the charge.

“From Chinese Communist Party-affiliated purchases of agricultural land to efforts by the party to influence state and local politics, states are on the front lines of our New Cold War with the Chinese Communist Party,” said Rep. Mike Gallagher (R-Wis.), chair of the House Select Committee on China.

Data on foreign agricultural land ownership, however, suggests that such legislation is an overreaction. Foreign ownership accounted for only 3.1 percent of U.S. agricultural land at the end of 2021, according to the latest statistics from the U.S. Department of Agriculture. Canada and the Netherlands led the foreign owners of U.S. farmland with 0.97 percent and 0.37 percent ownership stakes respectively, while Chinese entities owned only 0.03 percent.

Beijing says the flurry of new laws hurt the U.S. “To overstretch the concept of national security and politicize economic, trade and investment issues… undercuts international confidence in the U.S. market environment,” said Chinese embassy spokesperson Liu Pengyu.

Some state lawmakers are also nervous about such laws.

“I just feel that [such a prohibition] could lend itself to some abuse,” said Democratic Arizona state Sen. Brian Fernandez, a member of the Arizona Land, Agriculture and Rural Affairs Committee, during a meeting in February to discuss legislation that bars land purchases by entities from a short list of “designated countries,” including China. “Let's just say that I want to buy a piece of land, someone gets to it first, so I just go and be like, ‘Hey, that person's Chinese’ or ‘That person's from Iran.’”

There are similar concerns on Capitol Hill.

“We have to make sure that the cure is not worse than the disease,” said Rep. Raja Krishnamoorthi (D-Ill.), ranking member of the House Select Committee on China in last month’s hearing of the House Committee on Agriculture. “Dozens of bills across the country target Chinese nationals regardless of whether they are affiliated with the CCP and regardless of the proximity of their land acquisitions to sensitive sites.”

Despite these concerns, over the past two years federal lawmakers have produced 12 bills that would add farmland to the categories of investments subject to CFIUS review. There are four other bills that aim to specifically bar Chinese entities from purchasing land anywhere in the U.S. None of those bills have been enacted.

Reps. Elissa Slotkin (D-Mich.) and Blake Moore (R-Utah) introduced legislation last earlier this month that will place land purchases by foreign countries, including China, North Korea, Russia and Iran, under CFIUS scrutiny. The bill will require the Treasury committee’s approval of real estate sales with a value of more than $1 million or of more than 100 acres.

Scrutiny and approval of foreign purchases of farmland should remain “a federal issue because … the full weight of our insider information that we may have on a company and on individuals’ intentions does reside within the federal government,” Slotkin told a hearing of the House Committee on Agriculture last month.

In the meantime, the advocacy groups are expanding their push in the states. State Armor founder Michael Lucci said his organization aims to expand its focus on pushing state legislation banning land sales to Chinese entities to as many as 30 states in the next year.

“I proposed a CFIUS model at the state level because … I know what's going on there better than someone who doesn't live in South Dakota and lives all the way across the country,” South Dakota’s Noem told the House Committee on Agriculture last month. “No offense to the federal government, but it is very rare that you guys fix anything,” Noem said.