Home Finance News Top Republican accuses China of infiltrating Fed to access US data

Top Republican accuses China of infiltrating Fed to access US data


A prominent Republican lawmaker has accused China of establishing a network of informants within the Federal Reserve intended to give Beijing access to sensitive US economic data.

Ohio senator Rob Portman published a report on Tuesday alleging that China has for more than a decade targeted economists working for the US central bank to access insider information, using offers of lucrative contracts with Chinese talent programmes and in one case forcibly detaining a Fed employee during a trip to Shanghai.

The accusations come as US officials have raised concerns about the growing threat of Chinese espionage and infiltration against western groups, including companies, universities and hospitals. At the beginning of the month, the heads of the FBI and MI5 gathered for an unprecedented press conference to warn about the threat of China’s industrial espionage against western commercial life.

China has repeatedly denied accusations of targeting western institutions through espionage campaigns.

“I am concerned by the threat to the Fed,” said Portman, the top Republican on the Senate Committee on Homeland Security and Governmental Affairs, in a statement.

He added that he hoped the investigation “wakes the Fed up to the broad threat from China to our monetary policy” and urged the central bank to do more to “counter this threat from one of our foremost foreign adversaries”.

However, in a letter to Portman Fed chair Jay Powell pushed back against the findings and defended the protections put in place by the central bank to prevent any external influence.

“We would be concerned about any supportable allegation of wrongdoing, whatever the source,” wrote Powell. “In contrast, we are deeply troubled by what we believe to be the report’s unfair, unsubstantiated, and unverified insinuations about particular individual staff members.”

“Because we understand that some actors aim to exploit any vulnerabilities, our processes, controls, and technology are robust and updated regularly. We respectfully reject any suggestions to the contrary,” he added.

Portman is a prominent critic of Chinese activity overseas and has previously released reports on the country’s role in shipping illicit synthetic opioids such as fentanyl through international mail, as well as warning of the threat Chinese telecoms carriers pose in the US.

The report also alleges that China had attempted to recruit US-based economists to provide Beijing with insights into the inner workings of the Fed by offering places on talent exchange programmes that included lucrative monetary payments.

The authors wrote that several economists had attempted to transfer sensitive information to Chinese contacts through branches of the US central bank, but did not say whether there had been a significant data breach.

The report accused the Fed of failing to effectively counter the threat from China, saying it “lacks sufficient counter-intelligence expertise” and was slow to respond to intelligence threats.

The Chinese embassy in Washington, DC, did not immediately respond to a request for comment.

Additional reporting by Felicia Schwartz


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