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Arkansas PoliticsRead

Arkansas Tough on Chinese Companies? Yes and No.

Arkansas, in particular Governor Sarah Sanders and Attorney General Tim Griffin, have been getting much attention from around the country for getting tough on China by ordering Syngenta Seeds LLC, a Chinese state-owned seed company, to divest itself of ownership of about 160 acres of farmland in Craighead County.

The order is based on  Act 636 of 2021, concerning ownership of land by “prohibited foreign parties.” The action is significant because it is the first attempt by a state to make a Chinese company divest itself of land.

You may be hoping the recent action means Arkansas is now tough on all Chinese companies, especially those involved in technology? No, it doesn’t mean that.

Act 636 is divided into two parts. One section applies to ownership of agricultural land and another applies to any kind of land. Each section, however, includes its own complicated labyrinth of criteria, used to determine whether or not a company from a country such as China is prohibited from owning land in Arkansas.

The act doesn’t just apply to Chinese businesses, businesses from countries such as North Korea are included. But here we are just focusing on China.

Chinese Factory
Despite Syngenta Seeds LLC being ordered to divest itself of 160 acres of agricultural land, Craighead County also has a large China based factory. Risever, which is a Chinese based heavy equipment parts manufacturer, opened a steel fabrication facility in Jonesboro in 2019 valued at $20.5 million and is a large employer.[i] Risever was courted by former Governor Asa Hutchinson, who offered the Chinese Company $1 million from the Governor’s Quick Action Closing Fund in addition to other financial incentives to locate in Arkansas. [ii]

Chinese Crypto Mining Business
Chinese companies have also been in Arkansas news because some Chinese businesses have an interest in cryptocurrency mining businesses moving into Arkansas. A new law, Act 851 of 2023, which refers to data centers, exempts cryptocurrency mining from much local regulation. The law is controversial not just because Chinese companies are involved in the data mining the businesses. The biggest complaints concern the disruptive amounts of noise produced by the facilities and the heavy use of electricity and internet bandwidth.

Governor Sarah Sanders was urged to include a repeal of the law in the recent special session of the legislature. The Governor declined to do so. The legislature also rejected an effort requesting the legislature to add the issue to the special session.

Where Arkansas Stands
The recent action to make the Chinese company, Syngenta Seeds LLC, divest itself of agricultural land is a big deal because it is the first such effort in the nation.  But as we said, Act 636 has a complicated labyrinth of criteria used to determine who is prohibited from owing land in Arkansas. That means not all Chinese companies, even those involved in technology, are being pushed out of Arkansas.

  1. What do you think about Chinese businesses owning land in Arkansas?
  2. What do you think about Chinese ownership of other assets in Arkansas?

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