New Report Finds China is Trying to Gain Influence over the U.S. Federal Reserve
Senate investigators draw parallels to other efforts targeting science and technology sectors.
China has been working for over a decade to gain influence over the U.S. Federal Reserve System – America’s central bank – by targeting its economists via talent recruitment programs and sometimes outright intimidation.
So says a just-released report by Republican members of the Homeland Security and Governmental Affairs Committee in the U.S. Senate. It argues the effort is akin to the Chinese government’s well-documented forays into the U.S. science and technology sectors, which it has used to steal research. The report details that China, as the Wall Street Journal puts it, is actively trying to build an informant network inside the Fed.
From the report:
Despite these long-running and brazen actions by Chinese officials and certain Federal Reserve employees, the investigation found the Federal Reverse unable to counter this threat effectively. Compounding this was a lack of internal counterintelligence competency at the Federal Reserve or sufficient ongoing cooperation with Federal law enforcement and intelligence agencies. After the Committee initiated the investigation, the Federal Reserve implemented new policies prohibiting employees from accepting any compensation from a country of concern, including China. However, the Federal Reserve still has limited approval requirements for international collaborations or prohibitions on participating in a talent recruitment plan.
For his part, Federal Reserve Chairman Jerome Powell says the bank takes these allegations seriously and says it has “robust” policies in place to counter these kinds of campaigns.
Not to draw an obvious line from one thing to another, but … this is the kind of thing we should keep in mind as the Biden administration mulls rolling back Chinese imports tariffs that were levied in 2018 in response to widespread intellectual property theft by the Chinese government.
Doing so won’t alleviate inflation, no matter how many times these jamokes say it will, but it will reward China for behavior that damages the U.S. economy – behavior like, for example, building an informant network inside the U.S. central bank.
You can read the Senate committee’s report here.