Chinese agribusiness giant Fufeng gets US federal clearance for controversial North Dakota land sale

A US inter-agency body charged with assessing national security risks involving foreign investments announced on Monday it will not block a Chinese agribusiness subsidiary’s proposed US$700 million corn milling project in North Dakota.

After completing a 45-day review, the Committee on Foreign Investment in the United States (CFIUS) concluded that Fufeng USA’s purchase of 150 hectares (370 acres) of land in the city of Grand Forks from a private citizen is “not covered” under its jurisdiction.

In a statement released on Tuesday, the subsidiary of Chinese agribusiness giant Fufeng said CFIUS would not be taking any further action on the transaction, adding that the company was “pleased with the outcome of the CFIUS review” and was “looking forward to building its wet corn milling and bio-fermentation plant in Grand Forks”.

Welcoming the decision, Todd Feland, Grand Forks’ city administrator, told the Post that the result “gives the city of Grand Forks some positive feedback that the due diligence was done appropriately”.

The US departments of the treasury, defence and agriculture were the lead federal agencies involved in the inquiry, he said.

First approved in November 2021, the project has drawn suspicion in the city of 58,000 residents since early this year.

Concerned residents pointed out that the plant would be located merely 19km (12 miles) from Grand Forks Air Force Base, home to top US intelligence, surveillance and reconnaissance capabilities.

Some in the community have called the plans to build an agribusiness facility a smokescreen for espionage activities. Others fear it could “bring Communist China” to their neighbourhood.

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Ben Grzadzielewski, a resident who has led the fight against Fufeng USA, said in an email that the CFIUS report “does not indicate whether a national security concern was raised during the review of the transaction”.

He said the US Air Force, Department of Defence “or both may have identified national security concerns related to the transaction”, but since they must follow CFIUS regulations, they could not discuss them openly with the public.

“The Air Force may be considering other avenues to resolve those concerns,” he said, adding that both of North Dakota’s senators had received confidential information about the Fufeng project that “raised national security concerns”.

Responding to public outcry, US Senators John Hoeven and Kevin Cramer, both Republicans from North Dakota, have urged the city administration to jettison the project without a federal review, citing a lack of “transparency” in the CFIUS process.

“There will still be unaddressed security concerns that will impact the continued development of the Grand Forks Air Force Base missions,” Hoeven’s communications team said in an email to city leaders in August.

Cramer said on Tuesday that in light of the CFIUS’ decision not to review the project, he would ask for “intel directly from relevant agencies”.

“My concerns remain the same with the Chinese Communist Party investing in agriculture in North Dakota,” he said, stressing that he looked forward to “the classified briefing scheduled for next week to learn more”.

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Despite backlash, Grand Forks city council leaders have long defended their decision to approve the project, which they say will create some 700 direct and indirect jobs and bring in up to US$1 million in additional annual property tax revenue.

Feland said that “those who oppose will continue to have concerns” but the city “will continue with the objective process of moving forward with this development”.

Despite the setback, the residents have vowed not to give up.

“The fight is not over,” said Grand Forks resident Jodi Carlson. She noted that the decision did not mean the Fufeng project did not pose any security risks, just that the land sale did not fall under the jurisdiction of the CFIUS.