Why a Chinese investor is fast becoming France’s bête noire

A string of opaque land acquisitions has put the country’s farmers on edge. Should they be worried?

As one might expect, French agriculture carries weight in French politics. The country’s annual Agricultural Fair, which concluded this weekend, is a compulsory visit for every French president. Discontented farmers can wreak havoc in the streets, as they did last month to oppose a trade deal with South American nations. And foreign investors looking to buy farmland must first gain approval from a state agency.

Since 2016, however, a Chinese industrialist, Keqin Hu, has managed to amass a small empire of 2,600 hectares – without even asking. That includes 900 hectares bought since November, after initial purchases had already stirred controversy. Farmers’ unions are up in arms against what they see as covert “land grabs.” How did he do it?

The answer depends on who you ask. Some argue that Hu is using a loophole in French law: the government’s pre-emption right only applies if an owner sells its entire stock; keep only one share and you don’t need to ask. Others say this well-known lapse has been used by investors from other countries for years – without triggering the same hysteria. Why are French farmers so irked about seeing Chinese investors in their backyard?

In recent weeks, we conducted a broad-ranging investigation into these transactions and the man behind it. We spoke to wary locals and China-friendly business types; we quizzed industry insiders and farmers’ unions. The result is a mini-series in which we will explore what made these deals possible, the background behind them and how France is seeking to react.

Here’s what we can already say: farmers’ fears lie in the opacity surrounding these deals and suspicions that the firepower of Chinese investors will allow them to outgun locals in future auctions. Some of these concerns are grounded: though nominally private, Hu’s company is bankrolled by the state, as his boss (a former army bigwig) himself admitted to a source we spoke to. His investments seem at least partly motivated by a will to bolster the country’s food security.

Others see little reason to worry. France’s countryside is suffering; foreign investment can only help, says Emmanuel Gros, of the French chamber of commerce in China. Another source remarks that any sale of French-grown cereal must first transit via co-operatives, meaning the country retains control on exports. This camp views comparisons with Australia, where Chinese firms have lately bought farmland en masse, as disingenuous. Some suspect unlucky bidders for Hu’s farmland to have started the controversy.

Who’s right? The answer is not straightforward. Farmers are right to complain that such deals lack transparency: the companies holding the assets, in some cases, seem to have been formed only days before transactions were executed; little is known about the buyer’s motives. But the government should avoid knee-jerk reactions. China is far from being the largest foreign investor in French farmland. Singling it out at this early stage without clear justification would smack of discrimination, all the more as France has other means to intervene whenever transactions are deemed genuinely “strategic.”

President Emmanuel Macron’s response has so far been balanced. “We can’t allow hundreds of hectares of land to be bought by foreign powers without us knowing the aims of these purchases,” he said last month. Prompting Chinese investors to engage with unions and authorities, as some have successfully done when acquiring chateaux in Bordeaux, could help defuse tensions. Whether it will be enough to placate farmers’ demands for protection, of course, is another question.

Our series on China’s acquisitive drive in the French countryside will run throughout the month. Stay tuned on agriinvestor.com for future episodes.

You can also write us at matthieu.f@peimedia.com for any comments or suggestions.