Buyers from the People’s Republic of China purchased $6.1 billion in real estate last year, the most of any foreign buyer. Many of these purchases over the past few years have been of farmland or ranchland near U.S. military bases.
Revelations from a groundbreaking exclusive CNN story published on July 23 about telecommunications equipment from China’s Huawei installed in rural America suggest that Chinese land purchases could pose a severe national security threat as well.
CNN chronicles the Chinese government’s more than decade-long effort to establish a massive electronic intelligence and jamming capability in the U.S. adjacent to military installations and in Washington, D.C. Such a system could deliver a crippling electronic Pearl Harbor against American nuclear weapons systems and strategic communications vital to deterring and defeating a military surprise attack.
The report details how China’s state-supported telecommunications giants, Huawei and ZTE, sold cell tower equipment and routers, often at a loss, to small, rural telecommunications providers in the heartland. Much of the made-in-China equipment was installed adjacent to the land-based leg of America’s nuclear triad — the 400 Minuteman III Intercontinental Ballistic Missiles (ICBMs) — in Colorado, Montana, Nebraska, North Dakota, and Wyoming.
Chinese telecommunications equipment presents four threats: real-time communications intelligence, real-time imagery intelligence, offensive signals jamming, and internet attacks. In the age of software reprogrammable digital electronics, cell tower transmitters and receivers can be remotely reconfigured to listen to nearby military transmissions. Cell tower transmitters can be ordered to broadcast on certain frequencies used by the military, a tactic known as jamming. Similarly, cell towers’ connectivity to the internet could be used to overwhelm or degrade internet service in the early hours of a conflict. Many of the cell towers installed cameras in recent years to provide real-time traffic and weather conditions. Many of these cameras also monitor traffic around sensitive U.S. military installations.
The FBI’s counterintelligence investigation into this threat was so sensitive that senior policymakers in the White House and Congress weren’t told until 2019. Soon after, the Federal Communications Commission issued a rule banning small telecoms from using certain kinds of Chinese manufactured equipment. In 2020, Congress appropriated $1.9 billion to rip out and replace about 24,000 pieces of Huawei and ZTE equipment in rural America. But none of it has yet been removed, and carriers insist that the federal government is $3 billion short of making them whole.
Chinese telecommunications equipment remains a ticking timebomb, with resistance to its removal ranging from economic justifications to cries of xenophobia.
How did we get here? The Chinese Communist Party practices strategic mercantilism, fostering key technologies with dual-use civilian and military applications while driving competing industries in other nations out of business.
In the 1970s, the world’s two largest manufacturers of telecommunications gear were headquartered in the U.S.: Western Electric and ITT. Less than two dozen years ago, the two largest were U.S.-based Lucent and Canada’s Nortel. America saw its manufacturing dominance slip from producing one-third of the world’s telecom equipment in 1997 to barely more than one-tenth today.
The People’s Republic of China played a key role in that decline. In 1979, China declared its telecommunications industry as strategic and stated that it required “absolute control.” In 1982, China imported 100 percent of its telecommunications equipment. By 2000, it was self-sufficient, importing no foreign equipment.
China’s path to dominance was simple: It leveraged Western demand for quarterly profits by telling foreign suppliers that they had to manufacture the products they sold to China in joint ventures with Chinese firms. China then built its supply chain to provide the inputs for these joint ventures as well as to steal the intellectual property with the goal of eventually being able to make high-end equipment. The result is that today, U.S. telecommunications service providers rely almost entirely on Chinese or European suppliers—with China routinely offering cheaper prices.
The Importance of Real Estate
Voluntarily purchasing problematic Chinese equipment is one thing, but what happens when China controls real estate near military bases or important government facilities?
An odd 2017 deal illustrates the importance of strategic real estate. That year, China offered to pay the entire $100 million cost to build the National China Garden on 12 acres at the U.S. National Arboretum in Washington, D.C. Concerns voiced by American counterintelligence officials resulted in the project being rejected just before construction was due to begin. Among their misgivings: The proposed pagoda on one of D.C.’s highest points would be built from materials shipped to the U.S. in diplomatic pouches, meaning no import inspections.
This Chinese project attracted attention because it was on federal land in the nation’s capital. On the other hand, purchases of land in private transactions frequently escape attention until after the fact.
The Fufeng Group intends to build a corn-milling plant on 300 acres it just purchased in Grand Forks, North Dakota, 16 miles from the U.S. Air Force’s Air Combat Command base.
But the $2.6 million land purchase is a good thing, some might argue. The Chinese firm plans to invest another $700 million in the area and generate 200 jobs—besides, America has a trade deficit with China, and those dollars must go somewhere, so why not see them reinvested in the U.S.? Further, it’s not like the Chinese can pack up American land and take it back to China with them. And, while some express concern about China owning agricultural land (Chinese interests now own 192,000 agricultural acres worth almost $2 billion), even if China were to decide to divert all production to China or cease agricultural operations, production could easily be restarted.
The CCP Problem
But what most Americans don’t know is that every Chinese company with 50 or more employees must have a Chinese Communist Party (CCP) official embedded in it. This CCP political officer is a looming presence in any firm hailing from a nation with no rule of law other than what CCP officials say it is. Thus, while the Fufeng Group likely has legitimate business purposes for investing in Grand Forks, so too does the CCP have strategic military purposes for using Fufeng’s North Dakota base for its own purposes.
In April, U.S. Air Force Major Jeremy Fox wrote an unofficial memo highlighting concerns that the Grand Forks perch was well sited to intercept military communications between “unmanned air systems” and “space-based assets.” A USAF spokesman subsequently downplayed Major Fox’s concerns as his “personal assessment of potential vulnerabilities.”
Similar concerns have been expressed about the purchase of a 130,000-acre ranch on the border with Mexico near Laughlin Air Force Base in Del Rio, Texas. The site is home to a wind turbine project that, due to its connection with the Texas grid, could be used to disrupt the state’s electric system. Further, the land—which features a large airstrip, as do many Texas ranches—could be used to coordinate activities with the transnational drug cartels across the border.
In both cases, in North Dakota and in Texas—and on any other large agricultural or industrial facility—equipment might be positioned for purposes other than purely commercial reasons. And, since Chinese nationals and companies must obey the CCP, if they don’t cooperate, they risk losing everything up to and including their freedom and their lives.
FBI Director Christopher Wray told CNN that the FBI opens a new China counterintelligence investigation every 12 hours with about 2,000 active investigations, excluding cyber theft, which is a criminal matter.
Retired U.S. Navy Capt. James “Kimo” Fanell was the chief of intelligence for the Pacific Fleet and notes that large parcels of land or industrial sites could host signals intelligence or electronic warfare equipment such as jammers. He observed, “While our Customs inspectors are hardworking people, they’re overloaded, especially today with the Biden administration’s de facto open border policies. The idea that a strategic adversary could buy land near U.S. military bases does not pass the common sense test.” He added, “We’ve got to do better as a nation to defend our citizens from these kinds of obvious threats.”
Given the sluggishness of the American response to the grave danger posed by communist China—a response slowed over fears of being accused of racism or by economic arguments made by well-funded lobbyists for Chinese interests or U.S. multinationals—it doesn’t take much to imagine the varied nature of attacks we might see on the homeland during the first few days of a Chinese invasion of Taiwan.
The time for talk is over; we need action.