A China-based agribusiness with links to the Chinese Communist Party (CCP) is moving ahead with plans to build a corn mill in Grand Forks, North Dakota, despite local concerns that the project could pose national security risks.
Fufeng Group—the second largest xanthan gum producer in China—recently purchased 370 acres located north of Grand Forks after the City Council voted to annex the property. The city then changed the parcel’s designation to an industrial zone from agricultural to allow the project to move forward under federal law.
A Hong-Kong listed company, Fufeng Group is based in Shandong Province and has subsidiaries in 115 countries around the world.
The future corn mill plant would operate through U.S. subsidiary Fufeng USA on prime land about a dozen miles from Grand Forks Air Force base. Minot Air Force Base sits about 211 miles west of the city.
U.S. Sen. Kevin Cramer (R-N.D.) says the project raises many red flags in terms of national security.
Cramer specifically wants to know why the group selected to build close to a strategic military base in a remote northeast corner of North Dakota that houses sensitive drone, satellite, and surveillance technology.
Located 75 miles south of Canada, Grand Forks is “a wonderful spot in the Red River Valley,” Cramer told The Epoch Times.
“But it’s in the northern reaches of corn country. That in and of itself is a peculiarity,” he said. “It doesn’t seem like a rational investment for this type of facility.
“In other words [logistically], you would have a corn milling plant in the middle of the corn belt. If this project were 150 miles south of Grand Forks, it would be surrounded by corn fields.”
Fufeng Group and Fufeng USA argue they aren’t on the White House national security prohibition list.
“The National Counterintelligence and Security Center (NCSC) does not consider agribusiness or wet corn milling an economic and national security concern,” according to a group fact sheet. “The sectors of concern are artificial intelligence, biotechnology [such as biomaterials, biopharmaceuticals, and new vaccines and drugs], autonomous systems, quantum computing, and semiconductors.”
Fufeng USA, a global bio-fermentation company, plans to use the corn mill facility to extract ingredients that go into animal nutrition feed products sold in the North American market.
On July 14, Cramer and fellow Sens. Marco Rubio (R-Fla.) and John Hoeven (R-N.D.) sent a letter to U.S. Treasury Secretary Janet Yellen and Department of Defense Secretary Lloyd Austin expressing their concerns.
In the letter, the senators requested that the Committee on Foreign Investment in the United States (CFIUS) does a full review of Fufeng’s corn mill plans for potential security violations.
“Public reports suggest that CFIUS has expressed interest in this transaction and that the city of Grand Forks has requested the company make a voluntary filing with CFIUS,” the senators wrote. “We believe that a full CFIUS review would clarify whether the purchase of this land by Fufeng Group carries national security implications.”
The situation has “led to concern that Fufeng operations could provide cover for PRC [the People’s Republic of China] surveillance or interference with the missions located at that installation, given Fufeng Group’s reported ties to the Chinese Communist Party.”
However, city officials see the Fufeng USA project only as a win for the city of 59,000 residents, with the lure of jobs and tax revenue.
“The benefits would be similar to any new primary sector business coming to town,” Grand Forks Mayor Brandon Bochenski said.
At least on paper, the project anticipates creating 1,000 construction jobs and 233 full-time positions, paying an average salary of $59,000. The corn mill would generate millions of dollars in property and sales taxes and spur infrastructure improvements in alignment with the city’s economic development plans.
Bochenski said local farmers would also benefit from the increased business, while the city would reap additional water and wastewater income for capital improvements.
For the past nine months, the project has been in a “due diligence phase” as Fufeng USA works through the details of an approved development agreement with the city council.
“It would require likely another eight to nine months of due diligence before any construction and ongoing monitoring if the plant is ultimately built,” Bochenski told The Epoch Times.
However, many residents fear that the project would cause pollution and other environmental problems and drain local water resources.
Then there’s the perceived threat of spying by the Chinese government.
“We know specifically that [Fufeng Group] has links to the Chinese government. There’s not a company out of communist China that doesn’t have ties to the government,” said Jodi Carlson, a member of the local opposition group Concerned Citizens of Fufeng Group Project in Grand Forks.
Fufeng Group has “close ties” to the CCP through its chairman, Li Xuechun, according to a spokeswoman in Cramer’s office.
“He previously participated in Shandong 12th People’s Congress and has received praise for being the ‘Model Laborer for his business achievements.’”
As the company’s controlling shareholder, Xuechun has been the top executive at Fufeng Group since November 2016. He once served as a member of the People’s Congress of Shandong Province for five years.
Bochenski said the city has approached the project with “a high level of due diligence.”
“We see economic benefits of a new wet-corn milling facility in the region,” he said. “We are doing as much due diligence as possible and look to the appropriate federal agencies for national security insights and direction.”
Cramer said his “personal view” is that the U.S. government shouldn’t allow companies based in China to become involved in U.S. agriculture.
“Beyond that, there’s concern about the location,” he said. “The Chinese Communist Party has proven to be very competent at spying—very competent at stealing data. It doesn’t make sense to me that we would welcome that kind of investment in [Grand Forks].
“Even if you investigate, we already know there are links to the Chinese Communist Party [which] uses economic leverage over countries all the time. They’re predatory lenders in third-world countries.”
Cramer pointed out that North Dakota has no shortage of workers. With 30,000 jobs available in a vigorous state economy, the state’s agricultural and business sectors are robust.
“North Dakota is not a desperate place [in need of foreign investment],” he said. “We are doing very well economically. We also are a commodity-based economy. So when food prices go up, [agricultural producers] do very well. We are, in some respects, recession-proof. We produce a lot more than we can sell.”
As such, Cramer said he favors doing more business with America’s allies and less with its adversaries—”particularly concerning aggressive economic warfare” by China.
Keith Lund, of the Grand Forks Region Economic Development Committee, recently billed the Fufeng USA project as “the largest single private capital investment in the region’s history.”
Local media outlets reported that the plant will be a “wet-corn milling” facility and that it should be fully up and running by 2024 or 2025 at a total construction cost of about $350 million.
Project opponents feel the project would sap the city’s local water supply, using an estimated 6 million gallons per day while the city consumes roughly 7 million gallons.
They also voiced concern about odors, pollution, and other environmental hazards the project might cause.