Mike Rounds Asks Witness About China Purchasing Agricultural Land Near Sensitive Military Sites

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During a Senate Banking Committee hearing last week, Sen. Mike Rounds (R-SD) spoke about Chinese firms purchasing agricultural land near military installations.

Transcript

00:00Thank you for the opportunity to visit with all of you today.

00:03It is appreciated that you come in and to do this with us.

00:08We did a piece of legislation that we proposed called the PASS Act.

00:12And my question will begin with Dr. McGinn.

00:16As you know, there have been numerous reports of suspicious activity by U.S. adversaries

00:20in regards to U.S. agricultural land purchases.

00:24I appreciate the work CFIUS has done over the last year

00:26to expand security review authority over foreign purchases of real estate

00:31near American military bases.

00:34I believe the recent action to add a net total of 56 facilities across 30 states

00:40to the CFIUS review list is an important first step.

00:45But I think we're going to probably have to go farther than that.

00:47I think it's critical that Congress passed legislation, the PASS Act,

00:52that I've introduced with Senator Cortez Masto and many others

00:56to curtail agricultural land purchases

00:59by our stated foreign adversaries near military bases.

01:05So for Dr. McGinn, I want to thank you for your testimony

01:09and for your support of this legislation in your testimony.

01:14How significant of a national security threat is China?

01:20China is our principal national security threat facing us today.

01:25Today, there are numerous examples where they have tried to gather data

01:33or they have looked at setting up facilities near sensitive sites

01:38within the United States.

01:42That's correct.

01:43Senator, I used to oversee CFIUS when I was in the Department of Defense

01:48several years ago and there was a big turn in the mid to late 2010s

01:55when CFIUS transactions were principally from European-based countries

02:00or Japanese-based countries or the like to become,

02:04and China started using state-owned enterprises or private companies

02:08to do that, conduct transactions.

02:12And so what that led to is Congress acted and established FIRMA,

02:17you know, passed the law that modernized CFIUS

02:19specifically to address these kind of threats.

02:22And I will say, I can't talk about specific transactions,

02:25but those kind of proximity transactions were really, really closely monitored

02:30by the committee and they continue to be so.

02:34So I would encourage you to work with the, look, talk to the committee

02:39about the gaps that they see either in the Department of Defense or Treasury

02:43and how you potentially, your legislation could potentially help the CFIUS authority.

02:48But the more that we can strengthen and protect our national defense assets

02:56geographically in the United States, the better.

02:58Great. Thank you.

02:59I appreciate the support on that legislation.

03:01Ms. Lyon, South Dakota and states like mine have mineral resources

03:06that could contribute to our national defense

03:08and reduce reliance on adversaries like China.

03:12Given the permitting challenges and price manipulation,

03:15you've described what steps, legislative or administrative,

03:18would help make DPA support more effective for companies trying to establish

03:23domestic processing capacity?

03:25Thank you for the question, Senator.

03:28Processing is absolutely the next link in the supply chain that we must be concerned about.

03:35It doesn't make sense to take all of this effort to get minerals out of the ground

03:40to have to send them to China for processing.

03:44Antimony is a really interesting case where China controls about 50% globally.

03:48They control 80% to 88% once you include secondary processing.

03:54So we've got to figure out how to bring not only the mineral production home,

03:58but the processing as well.

04:00And it needs to happen in parallel.

04:02Because we've got a bit of a chicken and egg problem,

04:04where it's difficult for a new processing facility to be built and put online

04:09if it doesn't know it has the minerals coming in the door.

04:12And at the same time, once the minerals are ready,

04:15you can't wait three years for the permitting and development of a processing facility.

04:20So DPA can absolutely use its authorities to help these things occur in parallel with one another.

04:27And that requires investment.

04:29I think that's one of the most important reasons why we need to move forward

04:32with the reauthorization on DPA.

04:36And with that, on behalf of the chairman, I will recognize Senator Reid.

04:40Thank you very much.

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