A Sioux Falls meatpacking plant was forced to close when it became the epicenter of COVID-19 in South Dakota. Three weeks after executives from its Chinese owner, WH Group, visited the plant, a month after President Trump’s ban on travel from China, nearly 600 of Smithfield Foods’ 3,700 employees tested positive for the virus, as have 135 additional people in close contact with employees.
Smithfield Foods was started in 1936 by a family in Virginia. Today, the Chinese own Armour and the famous Smithfield hams, together with the most quintessential American brand of all: Nathan’s Famous hot dogs, with its iconic annual eating contest.
n 2013, Smithfield Foods was bought by the Shanghui Group, later rebranded as the WH Group, for $4.7 billion. It remains the largest total acquisition of a U.S. company by the Chinese. With that purchase, the Chinese owned one in four pigs raised in the U.S. and, by adding 146,000 acres, continued to be the world’s largest buyer of American farmland.
The purchase was underwritten with a $4-billion Bank of China loan facilitated by the Chinese Communist Party. The deal was an integral part of the CCP’s 2011 five-year plan to improve the Chinese economy with purchases of overseas farmland and food processing companies. Food is poised to become the oil of the 21st century, with demand increasing for a scarce resource. The CCP identified meat processing as a strategically important industry, and, with the Smithfield acquisition, China gained access to the world’s most advanced animal processing technology. Former Smithfield CEO Larry Pope said, “In many respects, this is carrying out the (Chinese) government’s five-year plan, which is to improve the quality and the security of their food supply.”
The Chinese consume half of the world’s pork production. Pork supply is so important to them that, just as the U.S. government maintains a strategic oil reserve, China stashes away vast amounts of frozen pork in case of shortages, outbreaks of swine disease, or war. Smithfield has retooled to give greater focus to the China market. “Down the road, if this continues and we ship a lot of product to China, certainly I think we (in America) could see shortages, particularly on hams and bellies,” admitted Smithfield’s director of procurement.
Smithfield is run by Wan Long, a former foot soldier in Mao Zedong’s army. WH Group is the world’s largest producer of packaged meats. Wan’s path to dominance was cleared by Li Keqiang, now a member of the CCP’s Politburo Standing Committee, the party’s supreme leadership circle.
Here is why you should care.
For decades, China has been fighting a stealth war against us with the objective of replacing America as the dominant world power. “The removal of the United States as what they call the hegemon is the most important thing” to them, according to China expert Michael Pillsbury. The Chinese would prefer to win a 21st-century war involving acquisitions of strategic industries like food and communications over a traditional military conflict.
In an article in the Atlantic, H.R. McMaster, President Trump’s former national security adviser, notes that Chinese president Xi Jinping told Trump in 2017 that the CCP is relentlessly pursuing the “great rejuvenation of the Chinese nation” — the “China dream.” McMaster relates a conversation with Li Keqiang, who indicates that the U.S. role in the future global economy will be “to provide China with raw materials, agricultural products, and energy to fuel its production of the world’s cutting-edge industrial and consumer products.”
According to McMaster, China’s leaders believe they have a narrow window of opportunity to revise the international order in their favor before other countries realize that the party is pursuing national rejuvenation at their expense.
Our response to the coronavirus pandemic has been severely impacted by Chinese control over the manufacturing of strategic pharmaceuticals and essential personal protective equipment — masks, surgical gowns, and gloves. This should be the shot across our bow. The Smithfield story is another reminder that Beijing’s economic grab is strategic and goes far beyond drugs and medical supplies. Chinese ownership of our essential food producers generates a similar vulnerability to our national security.
It’s time to counter the “China dream” with an American wakeup call. The alarm is ringing.
Ziva Dahl is a senior fellow with the news and public policy group Haym Salomon Center.