Let's F*ck With Xi, Part 2

Invoking Eminent Domain

Photo by Aaron Burden on Unsplash

Once again, it’s time to confound our favorite communist dictator.  This series of articles focuses on potential measures the US government could take that would have an swift impact on the threat posed to the United States by the People’s Republic of China (PRC).  Last week I discussed ending the practice of educating the PRCs population in our schools so that we might make infiltration of the US harder and cease augmenting the PRCs pool of technically proficient citizens.  This week, I’ll be addressing PRC property holdings in the US.

According to a 2021 Department of Agriculture report, the PRC directly or indirectly, through US flagged companies with PRC shareholders, owns around 384,000 acres of US agricultural land.  137,000 acres of that total was acquired between 2019-2021.  Moreover the PRC, or PRC nationals, spent around $6.1B* on US real estate in 2021 according to the National Association of Realtors.  The American Enterprise Institute estimates total PRC real estate investments between 2005-2022 at just north of $32B.  While these investments are not overwhelming, PRC controlled agricultural land comprises 0.9% of all foreign controlled agricultural land holdings, they are significant in several ways.

First several PRC agricultural land purchases are in close proximity to US military installations like Grand Forks Air Force Base in North Dakota, raising national security concerns regarding possible intelligence gathering activities.  Second, while the overall percentage of land is small, it is still almost 400,000 acres of US agricultural land.  Additionally the size of PRC holdings have rapidly increased in recent years, raising to prospect of a threat to US food security if the trend is allowed to continue unchecked.  This has prompted Governor of Florida, Ron DeSantis, to consider asking his state Legislature for legislation banning the PRC from land purchases in his state.  Similarly the PASS Act to prevent foreign acquisition of US farmland has been introduce in Congress.  This issue also isn’t unique to the US, Canada has now prohibited foreigners from buying property and begun forcing some PRC firms to divest themselves of critical mining operations within the country on national security grounds.

Even should such bans on the purchase of private property by individuals or corporations with links to the PRC pass at the State and Federal level in the US, the problem of existing holdings will still remain.  The question then becomes what to do about such residual holdings?  Eminent domain law would appear to hold the answer.

Eminent domain, in lay terms, is the ability of the government at the State or Federal level to confiscate private property in whole or part in service to the public good, as long as compensation is provided to the owner as stipulated under the 5^th Amendment of the US Constitution.  While traditionally this has been used primarily to facilitate infrastructure projects, public works, parks, and environmental projects, there have been notable exceptions.  During the Second World War eminent domain was used to acquire more than 20 million acres of private land to facilitate the war effort, everything from military facilities to wartime manufacturing and storage depots were built on the properties.  Additionally, the Supreme Court decision in Kelo v. City of New London, although provoking significant controversy, held that economic benefits are a permissible form of public use that can justify the seizing of private property.  Taken in combination, these precedents create an interesting possibility.

The wartime precedent during WWII confirms that eminent domain may be used on national security grounds.  The PRC is unquestionably a national security threat to the US.  The Kelo decision opens the economic door for the government.  American citizens owning an additional 400,000 acres of US agricultural land, in addition to billions of dollars more in other real estate holdings, would certainly be of a greater economic benefit to the country than that same land being held directly or indirectly by hostile foreign actors.  The argument almost writes itself.

The US Government could move to condemn and acquire property held, directly or indirectly, by PRC nationals or corporations on both grounds.  The property owners would necessarily be compensated in accordance with constitutional requirements.  The seized properties could then be sold to domestic or friendly foreign interests, preferably to private American citizens.

While this type of heavy handed action is rightly distasteful to those of us who value private property rights as an inherent good, there is a distinction to be made in this case.  These measures should not be employed by against any US citizen or entity not acting as a proxy for PRC interests in the United States.  Were this course of action to be taken, it would be of paramount importance to highlight the external national security threat of the PRC as the premise.  Weaponization of eminent domain against domestic concerns on the pretext of national security would be a catastrophic premise to establish.

The economic, intellectual, and political infiltration of the United States by the PRC is a critical national security threat.  Removing the ability of the PRC to acquire property or influence in the US agricultural and real estate markets impedes that infiltration.  While tactics like the employment of eminent domain and purchasing bans may go against free market principles, so does the increased power of Communist China.  In my opinion, the benefits of these tactics make them well worth careful examination.

*Author’s Note:  This figure from the NAR includes Taiwanese nationals, the actual dollar value from PRC real estate purchases is therefore somewhat lower.