Secretary of State Michael Pompeo delivered a tough warning about China in a speech to US governors, urging caution in business dealings as Beijing looks for ways to exploit US vulnerabilities and expands repression at home.
He had a pointed message for certain US state pension funds that may be investing in ways that help China’s government crack down on its Muslim minority, or even put US military personnel at risk.
“As of its latest public filings, the Florida retirement system has invested in a company that in turn has invested in surveillance gear that the Chinese Communist Party uses to track more than 1 million Muslim minorities,” Pompeo said at the National Governors Association’s winter meeting in Washington.
California’s pension fund, the country’s largest, “is invested in companies that supply the People’s Liberation Army,” Pompeo said without providing specifics. “That puts our soldiers, sailors, airmen and Marines at risk.”
The world’s second-largest economy is further embracing repression under President Xi Jinping, Pompeo said in a continuation of the commentary about Beijing that was a feature of his recent trip to Europe and Central Asia.
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“Competition with China is happening inside of your state and it affects our capacity to perform America’s vital national-security functions,” the top US diplomat said. “Competition with China is not just a federal issue.”
Pompeo said US engagement with China at the end of the Cold War was based on the assumption that it would turn toward becoming a liberal democracy.
“It didn’t happen,” Pompeo said. “Under Xi Jinping the country is moving exactly in the opposite direction: more repression, more unfair competition, more predatory economic practices, and indeed a more aggressive military posture as well.”
He added that those trends don’t mean the countries can’t do business, citing the recent “Phase One” trade deal between China and the US and prospects for a second round.
Chinese officials in the past have pushed back aggressively on US criticism — including those by Pompeo — as interference in the country’s domestic affairs. The Chinese embassy in Washington had no immediate comment on his latest comments.
Pompeo also said China’s government wants to exploit US freedoms to gain advantage at the federal, state and local levels.
“I’m asking you to adopt a cautious mindset,” Pompeo said. “In the words of President Reagan, when you are approached for introduction or a connection to a deal, ‘trust but verify.’”
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As an example, Pompeo said there had been concerns that the District of Colombia had considered buying railcars from a Chinese state-owned company for its Metro transit system. The move, which was never finalized, was scuttled after Congress passed a law prohibiting such purchases on cybersecurity grounds.
A government-backed think tank in China has assessed governors of all US states as friendly, hard-line or ambiguous toward it, Pompeo said.
“I would be surprised if most of you in the audience have not been lobbied by the Chinese Communist Party directly,” he added.
In London on Jan. 30, Pompeo, a former US Central Intelligence Agency chief, said China’s Communist Party “presents the central threat of our times.” In Kazakhstan on Feb. 2, he denounced China’s human rights abuses.
Pompeo’s comments align him with Vice President Mike Pence but contrast with President Donald Trump’s recent conciliatory language toward China.
Trump on Friday tweeted that he’d had a “long and very good conversation by phone” with Xi about China’s response to the coronavirus. “President Xi strongly leads what will be a very successful operation.”
Beyond posing a security risk, Pompeo said the lack of transparency was an issue for US investments in China.
“Their books are not wide open, so it’s difficult to know if the transaction that’s being engaged in is transparent and fair and follows the rule of law,” he said. “All of these things may well be legal, but the question is do they demonstrate good judgment and preserve America’s national security.”
