Republican Senator Marco Rubio is pressing management consulting firm McKinsey & Company to reveal their dealings with the Chinese Communist Party (CCP). In a letter sent to the company on November 13, the senator also raises the question of whether or not the United States government should continue working with the firm. McKinsey is headquartered in New York City and has offices in 65 nations.
McKinsey and China
“I remain concerned that McKinsey & Company — either wittingly or unwittingly — is aiding the CCP’s attempt to supplant the United States and remake the international community in its own image… We must ensure that firms working on behalf of the United States Government and U.S. companies are putting America’s interests first. McKinsey’s inability to provide clear, direct answers only exacerbates those concerns,” Rubio said in the letter.
Previously, the Republican senator sent a letter that inquired about the firm’s ties with the CCP. In its first response, the firm stated that the Communist Party has never been a client of the company. However, the firm admitted in its second response that they have done work for Chinese state-owned enterprises and have also provided advice to provincial as well as local governments.
Rubio questioned whether McKinsey had taken precautions to make sure that their Chinese clients were not under the control of the military and not involved in human rights violations. The firm refused to answer the query under the pretext of maintaining client confidentiality. The Senator also slammed them for dealing with Chinese clients who might be working in industries that are critical to the interests of the United States.
Back in 2018, media reports exposed deep ties between McKinsey and the Chinese government. The company held a retreat in the city of Kashgar, a place that is very close to the Uyghur internment camps. The firm is said to have played an important role in advancing Beijing’s Belt and Road Initiative (BRI), a project that has attracted criticism from the U.S. government, including concerns about how it is being used for debt-trap diplomacy in developing nations.
Given that the BRI is aimed at increasing Chinese influence and decreasing the presence of American companies internationally, Rubio expressed surprise at how the U.S. government continues to cooperate with McKinsey without even considering whether the company has been compromised by its relationship with the CCP.
Blocking capital access
In October, the Senator introduced a bill aimed at preventing blacklisted Chinese companies from accessing American capital markets. The bill proposed barring U.S. investment companies, insurance firms, and retirement funds from buying a stake in Chinese businesses that have been placed on the Commerce Department’s trade blacklist. In addition, companies that are identified to be backed by the Chinese military will be blocked. If approved, the legislation will ban these Chinese companies from trading on U.S. stock exchanges.
Rubio also introduced the Adversarial Platform Prevention (APP) Act in October, a piece of legislation aimed at establishing a set of censorship and data protection standards that have to be met by foreign software that is classified as high-risk. This includes apps like China’s WeChat and TikTok. Not meeting the standards would bar such software in the United States. The APP Act classifies software owned by an entity having principal operations in countries like China, Russia, Cuba, or Venezuela as high-risk.
