China’s invasion of our homeland

OPINION:

As the two biggest economies in the world fight for trade dominance, I am reminded of a national campaign my firm established in 2020 to track how Chinese investors were buying the controlling interests in thousands of American business operations. Our ads and website outlined the termitelike invasion, which was not apparent to the average observer.

The Chinese were not slapping their brands on American operations despite their controlling interest in major companies in industries such as food, over-the-counter medicines and movie theaters. These investments happened despite the federal Committee on Foreign Investment in the United States, which requires a multiagency review of any foreign entity buying an existing business or asset where a national security risk may be involved.

Many of these purchases sought a small foothold in an industry that avoided triggering that review. Chinese interests also employ an army of top U.S. law and lobbying firms to help them navigate purchase restrictions. The Washington Times has noted that China is recruiting downsized government employees with sensitive information backgrounds.

Recently, Chinese interests have quietly attempted to establish a foothold in our commercial water industry. Zhong Shanshan, considered one of the wealthiest men in China since 2021, is the majority owner of the Chinese beverage megacorporation Nongfu Spring. Chinese media reports say Mr. Zhong has family members with deep connections to the Chinese government and military. Earlier this year, his company spent $67 million to acquire a 337,000-square-foot commercial property on 23 acres in Nashua, New Hampshire. The unusual purchase by the richest man in China has mysteriously developed without public notice in a largely under-the-radar deal.

The Chinese Communist Party has a well-documented intent to blur the lines between public and private ventures, such as TikTok. Nongfu Spring’s quiet acquisition of the commercial property in New Hampshire has been troublesome as it appears to involve buying water from the locally owned utility company and bottling the water and tea for consumption. It is difficult to believe that this New Hampshire facility is the only one planned in America by the largest water company in China. The water-for-consumption business has thousands of such opportunities. After the Chinese capture of American radio station leases and American movie theaters, it is not too difficult to imagine a Chinese plan for gaining control over significant sources of our domestic water supply.

This is especially troublesome when evidence from the Beijing Times, a popular Chinese publication, suggests that Nongfu’s water quality standards in China have been lower than national requirements.

The U.S. has a clear division between the government and private businesses. Such a “Chinese wall” does not exist in China. There, businesses exist solely at the pleasure of the ruling CCP and can be cajoled into supporting its objectives. Given that reality, every Chinese-controlled company should be viewed through the lens of our national security.

Local governments should question the wisdom of letting a foreign company that serves under a hostile communist government be involved with a local water system in the U.S. The company might even be eligible for government subsidies to open shop, meaning taxpayer dollars could help bankroll a foreign company.

More fundamentally, an American company would never be allowed to do business in China with the apparent ease of entry into Nashua. China has thrown up numerous barriers, such as the requirement for Chinese ownership through joint ventures and intellectual property theft of American technology. If its companies want to do business here, they should be required to operate under the same rules that China imposes on U.S. companies operating in China. That would include all the proper licensing and environmental restrictions that come with ownership of some part of our basic water utility systems. Meanwhile, Chinese entities have been steadily expanding their ownership of American farmland. While sparking bipartisan concern from lawmakers on Capitol Hill and even from Agriculture Secretary Brooke Rollins, this new investment needs to be monitored.

This concern is well-justified. In China, foreign ownership of land is virtually impossible. The regime controls every square foot of land, and even leasing requires companies to jump through layers of bureaucratic hoops, including tax filings and local government approval. However astonishing this seems to be, in Nashua, New Hampshire, we appear to be curiously wide open for Chinese business, with few questions asked.

• Rick Berman is president of RBB Strategies.