A North Dakota City Attracted a Corn Mill. Then Came Questions About Its Chinese Owners.

GRAND FORKS, N.D. — For years, the leaders of Grand Forks had their eyes on a patch of cropland north of town, not far from a pasta-making facility, a potato processor and a state-owned flour mill where farmers received top dollar for their wheat. That muddy field, they thought, would be the perfect place for another agriculture business.

So when Fufeng USA, the American subsidiary of a Chinese company that makes components for animal feed, announced last year that it wanted to build a corn mill in that field, officials in Grand Forks celebrated. The mill, they said, would bring as many as 1,000 construction jobs and more than 200 permanent jobs to the city. Gov. Doug Burgum, a Republican, described it as a “huge opportunity” for all of North Dakota.

But what local politicians lauded as an unambiguous win soon divided Grand Forks. Some residents were excited by the prospect of more jobs and investment, but the company’s ties to China turned others against the project. Anti-Fufeng signs, including hammer-and-sickle flags, popped up in yards. City Council meetings that used to focus on road design and utility contracts suddenly turned into fiery discussions about communism and spying. Within a few months, the debate had reached Capitol Hill, and Grand Forks, population 59,000, had revealed just how mistrustful and dysfunctional America’s relationship with China has become.

For decades, the large flows of money and merchandise between the two nations made it the world’s most important economic partnership even as the United States pressed China to improve its human rights record. But attitudes toward China have turned sharply negative as politicians from both parties have increasingly portrayed the country as a threat, and as the pandemic helped fuel a rise in anti-Asian racism and highlighted Beijing’s embrace of a tougher authoritarianism.

The backlash in Grand Forks reflects the rising animosity and the tough questions the United States faces as it tries to reconcile public sentiment with an economic reality. Americans buy more goods from China than they do from any other country, China is a top destination for U.S. exports, and many Chinese firms have operations in the United States. Trying to unwind that relationship could mean higher prices and slower growth.

In Grand Forks, city leaders who welcomed investment at a tumultuous economic moment grappled with how the city’s desire to spur more growth fit into the context of geopolitical trends.

“I think what you’ve seen, at least recently, is a large push away from globalization,” said Mayor Brandon Bochenski, a first-term Republican who supports the new mill and added that it would be Grand Forks’s largest economic development effort in recent history. He asked: “Are we going to be the first one to basically say no to globalism?”

Mayor Brandon Bochenski of Grand Forks supports the project. “Are we going to be the first one to basically say no to globalism?” he asked.Credit…Lewis Ableidinger for The New York Times

‘Not a Local Issue’

In the aftermath of the Great Recession, when an aviation company with a Grand Forks factory was struggling, a firm owned by the Chinese government bought the company. Back then, the residents of Grand Forks, 75 miles south of the Canadian border, were mostly relieved that the facility stayed open. Eleven years later, the company, Cirrus Aircraft, has expanded, remaining a centerpiece of the Grand Forks economy.

But the new corn mill proposal came at a different moment.

A recent Pew poll found that 76 percent of Americans surveyed had an unfavorable view of China, and that 90 percent believed China did not respect the personal freedoms of its people.

Right after Fufeng said in late 2021 that it was coming to Grand Forks, people voiced the sorts of everyday concerns that come with many large-scale projects. They worried about whether the city had enough water to support the facility’s wet-milling process, which extracts amino acids from corn. They worried about odor. About traffic.

Over the course of a few weeks, the conversation started to shift. Around town and online, some people began to focus on the company’s ties to China.

There was no single, specific fear about the project.

Some people listed a range of human rights violations in China. Others had economic objections, questioning the wisdom of doing business with a country that the United States has named as a chief competitor for global influence, and whose espionage efforts the F.B.I. has called a “grave threat to the economic well-being and democratic values of the United States.” Some in Grand Forks said that they believed the mill would be used to spy on an Air Force base about 15 miles away, a claim the company denied.

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“It’s not a local issue. It’s a national security issue,” said Beth Waldeck, a retired teacher and Christian radio host. “I personally think that our City Council has been sold a bill of goods by Fufeng and they have stars in their eyes because they see money coming in, they see growth coming in.”

Most of the debate has been within the mainstream of today’s political discourse, echoing some of the nationalist, China-skeptical themes of the Trump administration’s foreign policy and the continued concern about China voiced by members of the Biden administration. But a few opponents of the project have espoused far-fetched theories, or used language that some considered anti-Asian scaremongering.

In just a few weeks, residents of Grand Forks, N.D., collected more than 4,700 signatures for a petition seeking a citywide vote on Fufeng, the company that wants to bring a corn mill to town. Credit…Lewis Ableidinger for The New York Times

In just a few weeks, residents knocked on doors and organized drive-through sites, collecting more than 4,700 signatures, or 8 percent of residents, on a petition seeking a citywide vote on Fufeng. The petitions were rejected on technical grounds because the city said the issue didn’t qualify for a referendum. But objections continued to mount.

Ben Grzadzielewski, who helped gather petitions and is appealing their rejection, said his most pressing concern was the amount of water the mill would require, but that he also questioned doing business with a Chinese company. He was frustrated, he said, with the response of city leaders, who he said “try to make us look like tinfoil hat people.”

All of it caught city leaders off guard. Under growing pressure, they pledged to check with federal officials to make sure there were no national security concerns.

Ben Grzadzielewski, a Grand Forks resident who opposes the Fufeng project.Credit…Lewis Ableidinger for The New York Times

“I don’t think we quite had the clarity to understand that national-level politics were going to make their way to our local level,” said Shawn Gaddie, a civil engineer who is the secretary-treasurer of the board of the local Economic Development Corporation, which helped woo Fufeng to Grand Forks. “We just didn’t see that coming.”

A block in Grand Forks, a city of about 59,000 residents.Credit…Lewis Ableidinger for The New York Times

‘Maybe It’s Just a Corn Mill’

In April, Grand Forks officials invited the F.B.I. to brief them on Fufeng.

But that meeting, which started as an effort to allay fears, may have only increased suspicions.

At the request of the F.B.I., the meeting was held behind closed doors. Some residents who wanted to hear what the agency had to say held a protest. And though Grand Forks officials said they were left with the impression that there were no national security concerns about Fufeng, they acknowledged that the F.B.I. would not confirm that explicitly, leaving critics of the project unsatisfied.

Grand Forks is not a moribund city in desperate need of work.

Unlike in Maine, where Chinese investors resurrected an old mill a few years ago, or Ohio, where a Chinese glassmaker opened up shop in an abandoned General Motors factory, there is no jobs crisis in Grand Forks. The city is growing, the metro unemployment rate is below the national average, and employers are hiring. In addition to jobs in agriculture and the military, residents work in manufacturing or at the University of North Dakota, known for its aviation program and powerhouse hockey team.

Still, Mr. Bochenski, the mayor, has stressed the economic benefits of Fufeng for his city, where 18 percent of residents live in poverty, well above the national rate. Farmers have welcomed the project as a new place to sell their corn, which grows in abundance in the fertile soil along the Red River. And Governor Burgum, a former businessman, has repeatedly stood by the project.

“With Fufeng in Grand Forks, it will be North Dakota — not China — that reaps the benefits of the jobs, facilities, economic activity and tax revenue associated with processing the corn,” a statement from the governor said.

It is fairly common for a Chinese company to do business in the United States, and for an American company to do business in China.

But as diplomatic relations have frayed, American officials, especially Republicans, have questioned whether the United States has grown too close to China economically, and whether seemingly innocuous Chinese investments could be used for nefarious purposes.

“Maybe it’s just a corn mill,” Senator Tom Cotton, Republican of Arkansas, told Gen. Charles Q. Brown Jr., the chief of staff of the Air Force, in May during a hearing of the Senate Armed Services Committee. “But it would also provide the potential at least for Chinese intelligence to engage in intelligence collection of various kinds.”

General Brown told Mr. Cotton that he was unable to discuss Fufeng in an open hearing. Air Force media relations officials did not respond to repeated questions by The Times about Fufeng.

Senator Mark Warner of Virginia, a Democrat who chairs the Intelligence Committee, said in a statement that we “should be seriously concerned about Chinese investment in locations close to sensitive sites, such as military bases,” when he was asked about the Fufeng project. And on Thursday, both of North Dakota’s senators, Kevin Cramer and John Hoeven, along with Senator Marco Rubio of Florida, all Republicans, sent a letter to the Defense and Treasury secretaries asking for a federal review of whether the project raised national security concerns.

Fufeng has said it will submit its plans to the Committee on Foreign Investment in the United States, which in recent years has examined several proposed Chinese investments, including the takeover of a major pork processor (approved) and the purchase of a money transfer firm (blocked).

The federal government has had little to say on the record about the project, which proponents of Fufeng have interpreted as an all-clear sign and opponents have deemed suspicious.

Eric Chutorash, Fufeng USA’s chief operating officer, said any suggestion that the facility would be used to spy on or harm the United States was false.

“Businesses operate in a different environment than the government operates in,” Mr. Chutorash said, adding that “we really have no relationship with the Chinese government.”

Grand Forks is home to several agricultural facilities, including a state-run flour mill.Credit…Lewis Ableidinger for The New York Times

Mr. Chutorash, who is based in the Chicago area, said “we’re going to buy corn locally in the U.S., we’re going to manufacture in the U.S., and we’re going to sell in the U.S.”

Liu Pengyu, a spokesman for China’s embassy in Washington, noted in a statement that Fufeng is a privately owned company. “We oppose the malicious generalization of the concept of national security,” he said.

Over residents’ complaints, the Grand Forks City Council approved the mill plans with votes in February and in June that created a development agreement with Fufeng and annexed the proposed construction site, which had been just outside of Grand Forks, into city limits.

A Lasting Cost

When the City Council approved plans with Fufeng, Katie Dachtler was the only member who voted no. Ms. Dachtler, who represented a ward near where the mill would be built, said her residents had legitimate concerns about the project, and she thought it was moving ahead too quickly.

Still, Ms. Dachtler, a political independent who was the Council’s only Asian American member, said the fight over the mill had exposed some longstanding racial biases. She said some opponents of the project had repeatedly equated the Chinese government with Chinese people, and others had been too slow to call out the hurtful language. About 82 percent of Grand Forks residents are white, and 3 percent are Asian.

Katie Dachtler was the only City Council member who voted against the mill.Credit…Lewis Ableidinger for The New York Times

“Hate can only percolate — and I’m going to call it hate and people are going to cringe and not like that at all — but hate can only percolate underground for so long,” said Ms. Dachtler, who was born in South Korea, and whose term ended last month after she did not seek re-election. “At some point the pressure has to be relieved. And Fufeng has served as a catalyst for some of these folks to release that pressure.”

A journalist for The Grand Forks Herald covering a protest of the closed-door F.B.I. meeting photographed one man with a sign that read, in part, “China Gave US Covid!” A letter to the editor of The Herald opposing the project mentioned dog meat. And Ms. Dachtler said some opponents of the project made a special point of repeatedly saying “Chinese Communist Party” in a way that concerned her.

“Semantics matter to people, and the things we say to people make them feel welcomed or like they don’t belong here,” Ms. Dachtler said.

Several opponents of the mill said they harbored no ill will toward Chinese people or Asian Americans but were worried about deepening business ties with a country whose government they considered an adversary.

“It’s not about the Chinese people,” said Jodi Carlson, a semiretired nurse. “It’s not about the Chinese culture. It is about Chinese communist government.”

One sign of how tense the debate has become came last month, when a Grand Forks police officer and an F.B.I. agent visited Ms. Carlson’s home after she accused the mayor of failing to listen to the will of the people. In a Facebook post, Ms. Carlson cited a portion of the Declaration of Independence that said it was a duty to “throw off” despotic governments. Ms. Carlson said in an interview that she had not been calling for violence, and a Grand Forks police report said she had not committed a crime.

Among opponents of the project, there has been disagreement about how much to focus on China and how much to focus on more traditional concerns, like environmental issues. Frank Matejcek, a semiretired farmer who owns land near the proposed construction site, said city officials had not been transparent in the annexation process and had failed to address his concerns about wastewater from the mill. But China was not his biggest worry, he said.

Frank Matejcek worries that the city has not been transparent about plans for the mill.Credit…Lewis Ableidinger for The New York Times

Construction on the Fufeng site remains at least several months away, and it will be at least a couple of years before any corn is milled there.

City leaders are already wondering what the backlash to this project might mean for the next international company looking to do business in North Dakota.

“We just want to be rational as we work through all those issues,” said Todd Feland, the city administrator. “If we’re going to say no to any Chinese investment, that’s going to limit our opportunities in the future.”

But tensions continue to rise.

At a City Council meeting in June, a man from another part of North Dakota said he believed that Fufeng planned to “infiltrate everything our military does” and suggested that officials who could not see that might be “working for the Chinese.” He was reprimanded by Mr. Bochenski after saying “I’ll come across this table,” a remark the mayor described as threatening.

When the man finished talking, members of the audience loudly applauded.

A road in Grand Forks that runs beside the proposed mill site.Credit…Lewis Ableidinger for The New York Times

Kirsten Noyes contributed research.

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