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Tuesday, May 21st, 2024

Report: Efforts by China to undermine U.S. Federal Reserve Banks ongoing

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A new report from U.S. Sen. Rob Portman (R-OH), ranking member of the Senate Homeland Security and Governmental Affairs Committee, has found that China’s efforts to undermine the U.S. Federal Reserve System have been going on since at least 2013.

According to the report, China’s Threat to the Fed: Chinese Influence and Information Theft at U.S. Federal Reserve Banks, a look at the Federal Reserve’s counterintelligence, as well as recommendations from the FBI that went unheeded, show that China has worked to target, influence and undermine the Federal Reserve through the use of an extended and effective information theft campaign.

“This investigation makes clear that China’s malign efforts at influence and information theft are not limited to science and technology fields — American economic and monetary policy is also being targeted by the Chinese government,” Portman said. “As our investigation reveals, the Chinese government is using every tool at its disposal to infiltrate and steal valuable information… I am concerned by the threat to the Fed and hope our investigation, which is based on the Fed’s own documents and corresponds with assessments and recommendations made by the FBI, wakes the Fed up to the broad threat from China to our monetary policy.”

The report detailed five previously unreleased case studies that showed how the Chinese government attempted to gain access to sensitive information on U.S. monetary policy. Among the case studies was a description of how one Federal Reserve employee was forcibly detained by Chinese officials and was threatened with imprisonment if he did not assist them with economic information. In another example, the report looked at another Federal Reserve Bank employee who interacted directly with officials at China’s Xinhua News Agency – a propaganda and intelligence collection arm of the Chinese Government.

The report recommended that the Federal Reserve work to counter the Chinese government by developing a strategy to combat both illegal and extralegal transfers of U.S. intellectual property and research; enhance its relationship with law enforcement and the intelligence community; and improve the protection of confidential information. The report said the Federal Reserve System should implement a “Know Your Collaborator” culture.