This piece was originally published in American Affairs.
Between 2017 and 2018, a single Chinese billionaire bought over 140,000 acres of land next to an American military base in southern Texas, and the government did not even know how many LLCs were initially involved in buying the land. It was not even the federal government that discovered these purchases originally, but a small group of conservationists who first sounded the alarm.
How can such a significant foreign investment in the United States escape detection? The incident points to a broader failure to track foreign investment competently, even as foreign ownership has become significantly more controversial in recent years. Senators are concerned about the threat of spying from property bought by Chinese companies next to military bases, the most recent example being the Fufeng Group’s purchases in North Dakota. Foreign owners of dating apps have been forced to sell their stakes to Americans due to concerns about data being leaked to the Chinese government. Increasingly, lawmakers want to know where investment is happening and whether it is in the national interest (in contrast to previous decades, when all investment was considered good investment).
Unfortunately, the United States is at present unable to answer these questions as effectively as it could. Relying on an inadequate data collection system for foreign investment, we have struggled to identify who owns what in sectors such as agriculture and energy. We are stuck asking basic questions over and over again. It is troubling, for example, that one must send a Freedom of Information Act request to the Department of Agriculture (USDA) to learn how many acres a foreign company owns in agricultural land; this information is not directly available to policymakers.