McKinsey Research Helped the Chinese Government

There’s a lot to dislike about the world-bestriding consulting firm McKinsey. And the Financial Times has just given us a little bit more. FT reports that the Urban China Initiative (UCI), a think tank founded by the consulting firm, “advised China to deepen co-operation between business and the military and push foreign companies out of sensitive industries as part of a project for the central government in 2015.”

UCI, founded in 2011 and shuttered in 2021, made the recommendations in Scientific and Technological Revolutions around the World, a book “commissioned by the Chinese government’s central planning agency.” Its research ended up informing China’s 13th Five-Year Plan, covering years 2016–2020. In a chapter on advanced materials, for example, the book explicitly recommended that the Chinese government “accelerate the conversion of military technology into civil use [ . . . and] promote the two-way transfer and dissemination of military-civil material technology,” courses it eventually pursued.

McKinsey, naturally, denies wrongdoing. In addition to claiming that it has never had the Chinese government as a client, the company distanced itself from UCI. But the Financial Times suggested these evasions might be disingenuous. Several people involved have described it as a “McKinsey initiative”; former staff members described themselves as McKinsey employees. One of them, Lola Woetzel, wrote in the book’s foreword that “we hope this book provides useful input for the planning and development of China’s technology enterprises and government institutions” and “we believe there is great potential for China’s science and technology in the years to come!” UCI and McKinsey also shared an office in Beijing.

This wouldn’t be the first time the company was not entirely truthful about its business relationship with the Chinese government. The lines in China between government and business are thoroughly blurred (and now more so, thanks to McKinsey), and McKinsey has advised at least 22 of the nation’s 100 biggest state-owned companies. Oh, also: In 2018, McKinsey, held a corporate retreat mere miles from Uyghur concentration camps.

Such behavior from McKinsey should not surprise us. The technocratic mind-set on which its practices depend frequently divorces itself from higher considerations, such as U.S. interests and the welfare of one’s fellow man (see also its role in supercharging the opioid epidemic). This mind-set makes questionable collaborations with either our government or outright unsavory cooperation with other governments, even ones antagonistic to the U.S., seem natural. In the company of bureaucrats also enamored of the top-down mental mode, McKinsey consultants find mirrors of themselves: social-engineering types who regard their fellow man as mere experimental fodder or data. Edmund Burke would have called all of them “sophists, economists, and calculators.”

Conservatives who defend free markets in general have no obligation to defend McKinsey in particular. There is, in fact, a strong case that conservatives are better-equipped than the Left, typically thought of as the main antagonist of business, to recognize the dangers the company poses. After all, in addition to its other defects, McKinsey, even in its less pernicious manifestations, often serves merely to ratify decisions that businesses were going to make anyway. Sometimes, that just makes them like the Bobs from Office Space. These days, that often includes signing on to trendy DEI and ESG initiatives and other left-wing political causes, which the firm is happy to promote.

So it was heartening to learn, in a follow-up Financial Times report, that politicians such as Representative Mike Gallagher (R., Wis.), are calling for McKinsey to be banned from U.S. government contracts. “It is impossible to square this self-described mission and set of values with McKinsey’s partnership with the CCP, the greatest enemy of human rights, the environment, and individual privacy in the world today,” Gallagher said. “One is left to conclude that McKinsey’s true mission is to make money, even if that money comes from genocidal communists.” Indeed. Gallagher’s proposal would thus be a welcome step in the wholly necessary effort to combat the McKinsey mind-set.