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.

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' largest economic development effort in recent history. He asked: "Are we going to be the first one to basically say no to globalism?"

'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% of Americans surveyed had an unfavorable view of China, and that 90% 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 FBI has called a "grave threat to the economic well-being and democratic values of the United States." Some in Grand Forks said they believed the mill would be used to spy on an Air Force base about 15 miles away, a claim the company denied.

"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."

A meeting with the FBI

In April, Grand Forks officials invited the FBI 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 FBI, the meeting was held behind closed doors. Some residents who wanted to hear what the agency had to say held a protest. And although Grand Forks officials said they were left with the impression that there were no national security concerns about Fufeng, they acknowledged that the FBI 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, Bochenski, the mayor, has stressed the economic benefits of Fufeng for his city, where 18% 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 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.

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," Chutorash said, adding that "we really have no relationship with the Chinese government."

Chutorash, based in the Chicago area, said that "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."

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. 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, Dachtler, a political independent who was the council's only Asian American member, said the fight over the mill had exposed some long-standing 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% of Grand Forks residents are white, and 3% are Asian.

"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 Dachtler, who was born in South Korea and whose term ended last month after she did not seek reelection. "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."

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, such as 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.

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.

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 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.