The Chinese government has targeted the Federal Reserve in an effort to undermine American monetary policy since at least 2013, according to a report released Tuesday by Republicans on the Senate Homeland Security and Government Affairs Committee.
The report detailed the actions of several Federal Reserve employees known as the “P-Network,” whose foreign travel patterns and academic backgrounds raised concerns internally.
One of these employees was detained four times during a 2019 trip to Shanghai as Chinese officials “threatened the individual’s family unless the individual provided them with economic information and assistance.”
Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. (REUTERS/Leah Millis / Reuters)
Other Federal Reserve employees also had “close ties” to the People’s Bank of China, Chinese academic organizations, and the state-owned Xinhua News Agency, according to the report.
One employee who had “continuous contacts with Chinese nationals” attempted “to transfer large volumes of data from the Federal Reserve to an external site.” Another employee transferred “modeling code” to a Chinese University tied to China’s central bank.
The Federal Reserve’s inability to counter China’s “long running and brazen” actions is a national security threat, the Senate report said.
Wang Chen, vice chairman of the standing committee of China’s National People’s Congress (NPC), delivers a report on a proposed foreign investment law during a plenary session of the NPC at the Great Hall of the People in Beijing, Friday, March 8, 20 (AP Photo/Mark Schiefelbein / AP Newsroom)
Federal Reserve Chairman Jerome Powell disputed many of the findings in a letter to Ohio Sen. Rob Portman, the ranking Republican on the Homeland Security Committee.
“We would be concerned with any supportable allegation of wrongdoing, whatever the source,” Powell wrote in the letter. “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.”
Still, the senate report comes as other intelligence and law enforcement officials have raised the alarm on China’s meddling in U.S. institutions.
“The Chinese government is set on stealing your technology – whatever it is that makes your industry tick – and using it to undercut your business, and dominate your market,” FBI Director Christopher Wray said last month. “And they’re set on using every tool at their disposal to do it.”
Reuters contributed to this report.