China is trying to infiltrate the U.S. Federal Reserve and steal information and influence, according to a senior Senate Republican. In a report released Tuesday, Ohio Sen. Rob Portman, ranking member of the Senate Committee on Homeland Security, said China has been targeting the central bank since at least 2013.
The 48-page report, based on documents provided by the Federal Reserve, detailed efforts by China to recruit U.S.-based economists for intelligence gathering, even forcibly detaining an employee four times in 2019 during a trip to Shanghai with his family.
The report said Chinese officials “allegedly tapped his phones and computers,” threatened imprisonment and told the economist he was to “share non-public, economic data” and “advise senior [Chinese] government officials on sensitive economic issues,” including information on trade tariffs and confidential meetings.
The Fed told the committee that it reported the incident to the FBI and State Department at the time and issued a general warning to all economists about travel to China.
The report also said the Fed itself identified 13 “persons of interest” with ties to Chinese talent recruiters and two instances of unapproved data transfers.
“[I] hope our investigation…wakes the Fed up to the broad threat from China to our monetary policy,” Portman said in a statement. “The risk is clear, I urge the Fed to do more, working with the FBI, to counter this threat from one of our foremost foreign adversaries.”
Fed Chair Jerome Powell responded to the report in a letter, saying the Fed takes any violation seriously and would not hesitate to include law enforcement when appropriate, according to Bloomberg. Straight Arrow News requested a copy of the letter from the Federal Reserve but did not get a response by time of publish.
The report was released as the Fed kicks off a 2-day policy meeting in Washington, where the board is expected to vote to raise its benchmark interest rate once again. Fed policy discussions are largely confidential and, once made public, have major impacts on the market.
