Senate Republicans released a report on Tuesday that suggests China tried to infiltrate the privacy of the Federal Reserve. Reportedly, a Fed employee was “forcibly detained” multiple times in China during his visit to the country in 2019.
China Tortured Fed Employee to Get Crucial Information
Chinese officials detained a single employee of the Fed at least four times. By doing this, they tried to extract secret economic data from the US by tapping the employee’s phones and threatening his family.
According to the US Senate investigators, Chinese authorities first detained the Fed employee in his hotel after hacking his telephone. The communist country accused the employee of “committing crimes against China.”
The PRC “threaten[ed] to imprison a Fed economist during a trip to Shanghai unless he agreed to provide nonpublic economic data, a congressional investigation found.”
Unsettling story highlighting PRC counterintel threat to economic & financial sectors. https://t.co/3zLgTOPmFl
— Peter Strzok (@petestrzok) July 27, 2022
Similarly, the Chinese government tried to steal sensitive information from the mobile phones and computers of the troubled employee. This information included the contact details of other Fed employees.
As per the report, this incident reveals a broader campaign by China to influence and undermine the US central bank’s authority in order to get an unfair competitive advantage in the global markets.
While Senate Republicans criticized the Fed for not taking any action to protect its employees, now the case is being directed to the State Department and FBI for further investigations.
Republican Senator Rob Portman noted the Chinese Communist Party is trying “every tool at its disposal” to steal valuable secret information from the US central bank.
Likewise, the senator suggested the money of American taxpayers should never be used to fund a Chinese economic rise; the Fed must take immediate measures to strengthen its security.
China spent a decade using its Thousand Talents program to try to build an informant network inside the Federal Reserve — including repeatedly forcibly detaining a Fed employee in Shanghai — in an effort to gain access to sensitive US financial data. pic.twitter.com/UtX6jiUICk
— MarketVitals (@MarketVitalsIO) July 26, 2022
Fed Dismissed Senate’s Concerns
However, Jerome Powell, the Chair of the Fed, dismissed Portman’s allegations. Powell wrote a letter to the senator, stating he has “strong concerns” about the implications of Chinese actions in the newly released report.
He also noted the Fed is trying hard to serve Americans in every possible way, adding its employees are committed to protecting the secret information of the United States.
Furthermore, Powell noted his department uses modern-day technology, which ensures the safety of important information, thus making any data breach highly impossible.
While describing close ties between Fed employees and the People’s Bank of China, the report mentioned one Fed employee even tried to transfer critical US data to China. However, it still remains unclear if the transfer was successful or not.
Meanwhile, the Chinese government spokesperson denied all the allegations in the Senate report.
Talking to the Wall Street Journal, the spokesperson declared that Sino-US cooperation in the economic and financial fields helped both countries develop mutual trust and respect on various fronts.
Whereas the latest allegations of the United States, the spokesperson continued, depict the “Cold War Zero-sum thinking,” which needs to be eliminated.