Top North Dakota Republicans split on Fufeng, business with China
“I still think it's a huge opportunity for North Dakota to have value-added agriculture,” said Gov. Doug Burgum. But Sen. Kevin Cramer believes that "we need a broader decoupling of China."
GRAND FORKS — When Fufeng Group first announced it wanted to come to North Dakota — and potentially bring hundreds of jobs to Grand Forks — Gov. Doug Burgum could hardly have been happier.
In City Hall’s November press release announcing the project, Burgum said the corn milling plant would be a “huge opportunity” for local farmers and workers. Days later, Burgum even visited Grand Forks for a dinner with Fufeng leaders.
Eight months later, things are more complicated. Fufeng Group's planned mill has come under close scrutiny for its roots in China, leading to speculation about potential espionage on nearby Grand Forks Air Force Base, control of the U.S. agricultural system and a raft of other concerns from local residents. The project will soon get a close review from top U.S. government officials at the Committee on Foreign Investment in the United States, also known as CFIUS.
Burgum, though, is still optimistic about the project.
“I still think it's a huge opportunity for North Dakota to have value-added agriculture,” he said, invoking the upcoming 100th anniversary of the State Mill and Elevator in Grand Forks, which he said helped boost prices and independence for state farmers. “We've been too long being dependent on raising commodities and then selling them and being at the mercy of the market.”
But as the Republican governor — in an interview with the Grand Forks Herald — earlier this week outlined his hopes for the plant, worries about links with China continue to grow. Sens. Kevin Cramer and John Hoeven, both fellow Republicans, requested the security review of the project earlier this month in a letter to top leaders.
“This property is approximately 12 miles from Grand Forks Air Force Base, which has led to concern that Fufeng operations could provide cover for (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,” they said in a letter also signed by Sen. Marco Rubio, R-Fla.
Burgum says he supports the review, and that he’s in regular contact with North Dakota’s congressional delegation — Hoeven, Cramer and Rep. Kelly Armstrong.
“And in those conversations all along, it's clear that it's not the responsibility of the state or the city of Grand Forks to figure out if there's a national security concern about this particular firm,” Burgum said. “So I feel like the senators are doing the right thing. … If there are security concerns that do exist, and those are brought to light, then that would change the (project).”
The corn mill initially came to North Dakota through a corporate site selector — approaching the North Dakota Department of Commerce on behalf of an anonymous client, James Leiman, department commissioner at the time, said in an email earlier this year. At first, Grand Forks was outside the area of interest for the selector, but was included after the state offered it, given nearby water, rail access and gas infrastructure.
“It is important to note that most projects approach the state via a site selector and it is not uncommon to learn of the company at the very end of the process,” Leiman wrote in May. “It is also not uncommon to broaden the horizon of site selectors so as to improve the state’s chance of winning a project over neighboring states.”
Burgum said he sees no changes that need to be made to the state’s business-courting process.
There are two ways to think about the Fufeng project: the highly specific — with concerns about the plant itself — and more broadly, with respect to the U.S. trade relationship with China.
That narrower look is where a lot of military security concerns are. Will the plant boost Chinese espionage?
No public evidence has emerged to support that yet, though critics point to both the plant’s distance to the air base and the Fufeng chairman’s ties to the Chinese Communist Party. Eric Chutorash, COO of Fufeng’s American subsidiary, has repeatedly said the company will not engage in spying.
The pending federal review could help resolve the matter. From city leaders to Gov. Burgum to North Dakota’s senators, there’s a broad consensus that this step — after all the controversy — now ought to be taken.
It’s that broader view of things where opinions start to diverge. How closely should the U.S. economy and supply chain be tied to China? One way of looking at Fufeng is that it would merely shift the point of sale for American crops, while creating American jobs. Cramer has rejected this, pointing out that it still puts a Chinese investor, instead of an American company, in the supply chain.
There are two things that are critically important to countries and states, Cramer said: food and energy.
“Well, we just happen to be blessed with a lot of both,” Cramer said. “And it would be crazy to submit too much of it — the supply chain for that — to somebody else, much less an adversary.”
Burgum sees it differently. He points out that the state is “close to dead last on getting foreign capital.” He declined to respond directly to Cramer’s remarks, but he did say that North Dakota must “be able to compete in global markets.”
“To the degree that someone might interpret that (position as) somehow I'm, you know, naive and trusting of China, I might be one of the only governors in the United States that's actually done business in China,” he said, recalling his time as president of Great Plains Software. “My first business trip to China was in 1989. And that was the first time I saw Great Plains Software pirated and available in a market.”
But this is different, Burgum argued.
“This is them putting capital in North Dakota,” he said. “There’s not a position where our IP (intellectual property) is going to China. It’s essentially, they’re bringing their technology and their investments here.”
Rep. Armstrong, also a Republican, has weighed in on this, too — though it was in January, long before espionage and security became the biggest concern about the deal. He said he sees the new plant as a positive business investment — not as the agricultural land-buying practice that’s set off so many alarm bells over the U.S. food supply.
“Our ag markets are completely intertwined with China now — they’re going to be in the future. They’re the world’s second largest economy,” Armstrong told the Herald earlier this year. “We can hold them accountable and sell our ag products to them at the same time.” His office did not fulfill a request for comment this week.
Doubters are still worried about the Fufeng deal, and see a need for more guardrails and work on Chinese trade. The Senate just voted 64-34 in favor of a bill to boost semiconductor production in the U.S. — giving subsidies and tax credits to domestic production — as the U.S. competes with China .
“I just feel like we need a broader decoupling of China … as it relates to their ability and their willingness to steal intellectual property to spy … to collect all kinds of data on Americans that they do through passive means as well as assertive means,” Cramer said.