The Corner

McKinsey-Tied Institute Advised China to ‘Vigorously Promote’ Military-Tech Program

Chengdu J-20 stealth fighter jets of the Chinese People’s Liberation Army (PLA) Air Force perform with open weapon bays during the China International Aviation and Aerospace Exhibition in Zhuhai, Guangdong province, China, in 2018. (Stringer via Reuters)

Senators Marco Rubio and Josh Hawley accuse the management consultancy of lying about its connections to the Chinese government.

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Senators Marco Rubio and Josh Hawley are accusing McKinsey & Company of lying about its connections to the Chinese government, citing its involvement in a report that had advised the Chinese regime to “vigorously promote” its military-civil fusion tech-advancement program and to use robots to “improve the success rate of combat operations,” National Review has learned.

In a letter addressed to the firm’s top executive, Bob Sternfels, on Tuesday, the senators revealed that McKinsey-backed experts had made those recommendations as part of a broader report that offered recommendations for China’s “Made in China 2025” economic strategy and Beijing’s five-year plan.

The Chinese Communist Party’s strategy of absorbing China’s tech companies into its defense–industrial ecosystem has become a major focus in Washington in recent years. It’s noteworthy that McKinsey, which has massive contracts with the U.S. government — including national-security agencies — allegedly advised the Chinese regime on how to sharpen its military prowess ahead of a possible future confrontation with America.

“While the report was written in the staid language of management consulting, ultimately it was an attempt to help the Chinese Communist Party (CCP) dominate the United States and other countries in cutting-edge fields,” the senators wrote, going on to list those high-tech fields and point out that they have military implications.

McKinsey claimed that it had no direct hand in the 2015 report when the Financial Times brought it to light in a story in February. It was compiled by the Urban China Initiative, a McKinsey-backed nonprofit that sought to propose solutions to policy problems facing China. Although it was a consortium that involved Columbia University and Tsinghua University, it was started and operated by the consultancy, a source told the FT.

Rubio and Hawley said that they view the firm’s claims that it was not behind the institute as merely the latest obfuscation by the consulting giant.

Rubio has previously alleged that McKinsey’s assertions that it never worked for the Chinese Communist Party, China’s central government, or the Chinese central military commission were false. He has cited the existence of a now-defunct website for McKinsey’s operations in China that advertised work for the central government.

In their letter this week, Rubio and Hawley accused McKinsey of offering “lawyerly evasions that fail to grapple with McKinsey’s role in supporting the most powerful adversary of the United States.” They wrote that McKinsey’s claim that it did not operate the Urban China Initiative is “another evasion.”

“The think tank was based at the same address as McKinsey’s Beijing office. The Urban China Initiative website, which was hosted on a domain owned by McKinsey, directed press inquiries to McKinsey’s Beijing office. McKinsey’s top China hand, Lola Woetzel — who then went by the name ‘Jonathan’ — wrote the foreword to the report,” Rubio and Hawley wrote in their letter. They also said that Woetzel hand-delivered a copy of the book to then-premier Li Keqiang.

Rubio and Hawley wrote that McKinsey’s refusal to admit its work with the Chinese government has disqualified it from working with the U.S. government going forward.

“We will continue to work to ensure McKinsey does not receive another dollar from the U.S. government until such time as the company owns up to its work on behalf of the Chinese government, severs all ties to the PRC, and commits to patriotic service on behalf of the United States of America,” they concluded.

These revelations about the McKinsey book, and about the firm’s work with the Chinese government more broadly, have already prompted Congress to advance legislation that bars the awarding of federal contracts to companies that also work with U.S. adversaries. Earlier this month, the Senate Homeland Security and Governmental Affairs Committee passed a bill that would institute such a ban.

Jimmy Quinn is the national security correspondent for National Review and a Novak Fellow at The Fund for American Studies.
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