New York Times: Senate Targets China, Voting to Restrict Farmland Purchases and U.S. Investment

The Senate on Tuesday voted overwhelmingly to block businesses based in China from purchasing farmland in the United States and place new mandates on Americans investing in the country’s national security industries, taking the first legislative steps of the new Congress to counter Beijing’s espionage activities and curtail its economic power.

The provisions, which would need to clear the House to become law, are a far cry from more ambitious efforts to target China’s economy through export controls and undermine its intelligence gathering and influence operations in the United States through a TikTok ban or other restrictions. But they represent a significant opening salvo for the Senate, where lawmakers have struggled for months to capitalize on widespread enthusiasm on Capitol Hill for taking action against China.

By broad bipartisan margins, senators voted to add the measures to the annual defense policy bill. One, which passed by a vote of 91 to 7, would ban the sale of farmland to certain foreign adversaries to bar businesses based in or working as agents of China, Russia, Iran and North Korea from purchasing a controlling interest in U.S. farmland or other agribusiness. A second, which was approved 91 to 6, would require Americans to notify the Treasury Department within 14 days of making any investments in the national security industries of those four countries, including artificial intelligence, semiconductors and hypersonics production.

“This is a critical step toward making sure we aren’t handing over valuable American assets to foreign entities who want to replace us as the world’s leading military and economic power,” Senator Jon Tester, Democrat of Montana and co-author of the farmland measure, said on the Senate floor.

The measures gained traction in recent months as lawmakers sought to build on the momentum of an industrial policy bill enacted last year, which directed sweeping investments toward the U.S. semiconductor industry. The farmland measure, aimed at clamping down on China’s ability to gain vantage points for intelligence gathering in the United States, received particular focus after the incursion of a Chinese spy balloon over U.S. airspace.

“It’s no exaggeration to say that we’ve helped build their economy into a near-peer status, helped them finance a military that threatens us and our allies in the Indo-Pacific,” Senator John Cornyn, Republican of Texas and co-author of the measure tracking investments, said on the Senate floor. “We need to understand as policymakers exactly what is going on.”

The legislation mirrors efforts by the Biden administration, which has for many months been working on an executive order forcing venture capital and private equity firms making investments in China to share more information with the government, as well as prohibit investments outright in a few key sectors that could be crucial to military prowess, like quantum computing and artificial intelligence.

Supporters see the measure as important for closing a loophole in American economic defenses against China: The United States currently restricts exports of certain advanced technologies to China, but it does not prohibit partnerships that help to fund the development of those technologies within China itself.

Financial firms and others have pushed back against the restrictions, saying that measures that are too broad could cause economic damage and put U.S. companies at a disadvantage against global competitors, who could rush into the Chinese market to take their place.

But the rules are largely finalized and could be issued in the coming weeks or months, according to people familiar with the plans.