FBI Director Christopher Wray said in congressional testimony Wednesday that China is asking U.S. and other foreign companies to host groups to monitor the CCP’s adherence to legitimacy.
Lei told the House Judiciary Committee that this is one way the Chinese government “abuses” joint ventures to obtain corporate secrets and information.
“No country poses a broader and more comprehensive threat to our ideas, innovation and economic security than the Chinese government and CCP,” Lei testified.
“In many ways, I think it represents the defining threat of our time,” he said.
Mr. Lei’s outspoken criticism of the Chinese government’s alleged intrusions into foreign businesses highlights the growing tensions between China and the United States in a space where words have been tightly guarded. His remarks also came on the heels of a high-stakes visit to China by Secretary of State Antony Brinken and Secretary of the Treasury Janet Yellen.
Wray said on Wednesday from Rep. Lance Gooden (R-Tex.) that by forcing companies operating in the country to allow the Chinese Communist Party’s internal “political cell” to operate, Wray “essentially threatens the United States.” I was asked if I was “nationalizing” a company.
“The CEOs I’ve talked to say they’re afraid to say something and they came to the FBI,” Gooden said.
Ray said this was a “very important issue” that deserved more attention.
“There is no law against joint ventures, but the problem we have is that the Chinese government too often abuses joint ventures and uses them as a way to gain unauthorized access to trade secrets and information.” said the FBI director.
Mr. Lei said Americans “would be shocked to hear” that virtually every company doing business in China should be allowed to use these cells.
“If we tried to introduce such a thing into an American company, or if the British tried to introduce it in a British company or anywhere else, people would go insane, and that’s right. ” he said.
Lei did not name specific companies mandated to house CCP cells in China. He also did not respond directly to Gooden’s concerns that the Chinese government was stepping up its use of these cells.
The U.S. Chamber of Commerce and the Business Roundtable, an advocacy group for CEOs whose members include top executives from major companies such as Apple and Nike, did not immediately respond to CNBC’s requests for comment on Mr. Wray’s remarks.
Commercial Risk Intelligence Platform Sayari warned According to a 2021 report, China’s private sector is facing increasing pressure to exert more influence over the so-called Chinese Communist Party cell.
These companies are required to set up a CCP cell from 2018 in order to be listed on the domestic stock exchange, Sayari said. According to the company, each cell is promoting a stronger role in corporate governance.
wall street journal report Last year, Chinese regulators changed rules for securities investment funds, for example, black rock Fidelity then creates a communist cell within its China operations.
Former Financial Times report or HSBC established a Communist Party Committee in China’s banking business, becoming the first foreign financier to introduce it.
This is not the first time Mr. Lei has expressed concern about the Chinese government’s efforts to impose a communist political view among foreign companies doing business in China.
“Under Chinese law, we’re getting to the point where Chinese companies of all sizes are required to host in-house,” Lei said in an interview with CNBC. ”They call it a committee, but it is essentially a cellular body whose sole responsibility is to ensure that the corporation adheres to the CCP’s orthodoxy. ”
“And this doesn’t just apply to Chinese companies. If foreign companies reach a certain size in China, it applies as well,” Lei told CNBC.
Those companies “have to comply,” he added. “They have to work together.”
The exchange with Mr. Gooden was a respite from the almost hostile questions Mr. Wray received from the Republican majority on the committee. Biden administration officials responded to intense questioning and frequent obstruction from Republicans, largely because of the administration’s political bias against conservatives.
— CNBC’s Christina Wilkie contributed to this report.
