The consultancy once said it did work for China’s central government, undercutting recent statements.
McKinsey & Company, the multinational, multibillion-dollar consulting behemoth, faced a renewed torrent of criticism surrounding its ties to China’s ruling party-state late last year, when NBC News reported that the firm had acknowledged in a court filing that it had a business relationship with the “Chinese government.”
Senator Marco Rubio, in response, accused McKinsey of having lied to him and his office about its business with the Chinese Communist Party and government.
McKinsey, however, told NBC that its disclosure, made in a bankruptcy case involving one of its clients, reflected something more benign: its work with government entities only at the provincial and local level within the country. The company said that the central government, the party, and China’s Central Military Commission “have never been” clients of the firm.
But for at least five years, starting in 2014, a McKinsey website that appeared to be a China-related offshoot of the company’s main website stated otherwise. By the company’s own telling — in the website’s “About” section — its work in China was a massive enterprise encompassing, at that time, more than 450 consultants across the mainland, Hong Kong, and Taiwan (labeled “Taipei” on the website).
That site, an archived version of which was obtained by National Review, said McKinsey’s clients included a number of Chinese central-government entities. (As of this writing, the archived version remains available on a popular web-archive portal.) This directly contradicts the consultancy’s public statements last year, as well as its statements to Rubio denying that it had ever worked with the central government.
A blurb on the site summarizes McKinsey’s work with its Chinese-government clients: “In the past decade alone, we’ve served over 20 different central, provincial and municipal government agencies on a wide range of economic planning, urban redevelopment and social sector issues.”
McKinsey website’s description of the firm’s work with the Chinese government (Screenshot)
The blurb, elaborating on McKinsey’s work for the central government, touted completed projects such as the training of Chinese government officials: “We’ve also advised several central government ministries on a range of high impact issues, from designing healthcare reform policies, to providing talent and leadership development programs for the next generation of government leaders to crafting policies and specific measures aimed at spurring more domestic consumption.”
The photo that accompanied the blurb appears to be an image of the massive auditorium inside China’s Great Hall of the People, where the People’s Republic of China and the ruling Communist Party hold official functions, including the annual National People’s Congress and Chinese People’s Political Consultative Conference. When the Chinese Communist Party’s National Congress, a monumentally important party confab held every five years, convenes later this year, the likely appointment of General Secretary Xi Jinping to an unprecedented third term will take place there.
McKinsey’s China-related website was taken down in early 2019 as tensions between the U.S. and China grew. Beginning in late February or early March of that year, visitors to the site would be redirected to a different page hosted on McKinsey’s main website, focusing on the firm’s analysis of the Chinese economy.
The China-focused website’s existence is certain to raise questions about why the firm claimed never to have formally worked with China’s central government when its own literature indicated otherwise as recently as three years ago — even as the company continues to stand by its recent denials.
In a July 2020 letter, a managing partner for the company told Rubio that, to her knowledge, neither the CCP nor the Chinese government had “ever been a client of McKinsey,” according to Rubio’s office, which publicized that correspondence after the NBC report.
Rubio, in a more recent statement to NR, claimed that McKinsey is hiding something: “At this point, McKinsey appears to have engaged in a massive cover-up of its work with the Chinese Communist Party. These previously undisclosed relationships make clear that McKinsey cannot be trusted to continue working on behalf of the United States government.”
For the time being, Rubio’s investigation into McKinsey’s China practices mostly takes the form of meetings and letters. But that could change. The Florida lawmaker is ranking member of the Senate’s Permanent Select Committee on Intelligence, and if Republicans take the Senate majority in this fall’s midterms, there’s a good chance he’ll set the panel’s agenda as chairman.
For its part, the consultancy denies any wrongdoing, and it stands by previous denials of having worked in any formal way with the Chinese central government.
A McKinsey spokesperson replied to NR’s request for comment about the website’s description of Chinese central-government clients with the same statement the firm provided to NBC in December. The statement emphasized that “we have been consistent and transparent in our communications with Senator Rubio’s office.” The spokesperson also doubled down on McKinsey’s claims to have worked only on projects with local and provincial governments relating to economic policy, urbanization, and real-estate development.
The spokesperson also reiterated: “Importantly, the central government of China, the Communist Party of China, and the Central Military Commission of China are not clients of McKinsey, and to our knowledge, none has ever been a client of McKinsey.”
The revelation that information once available on McKinsey’s own website contradicts its claims is likely to exacerbate concerns in Washington about the company’s work in China. NBC reported in November that lawmakers of both parties have also grown increasingly concerned that the firm’s contracts with the Pentagon could pose a conflict of interest, given its work for Chinese state-owned enterprises. The McKinsey website reviewed by NR stated that 30 percent of its Greater China clients were state-owned firms.
In late 2018, as the U.S. rivalry with China heated up amid former President Trump’s trade war with Beijing, concern about McKinsey’s activities reached a fever pitch. In December, the New York Times reported on McKinsey’s extravagant company retreat, which had taken place earlier that year in Kashgar, a city in China’s Xinjiang region, four miles from concentration camps holding Uyghurs. At that point, the U.S. had not yet labeled China’s actions in Xinjiang “genocide,” though it was widely known that at least 1 million Uyghurs were arbitrarily detained by the Chinese authorities.
Responding to the Times’ sweeping report, which detailed the firm’s work with autocracies around the globe, McKinsey issued a blistering statement, rebutting aspects of the Times’ story point by point. But in the last paragraph, it offered a concession of sorts: “We also accept the commentary about the retreat in China, and we will be more thoughtful about such choices in the future.”
Far from embracing a more open attitude about its work in China, though, McKinsey has been bizarrely cagey about one of the key business relationships it openly bragged about on its website in the recent past. The consultancy’s denials of a fact that it once publicly admitted will only invite more scrutiny of its dealings with the regime in Beijing.
