US Intelligence Warns State and Local Leaders to Be Wary of China’s Influence Activities

Director of National Intelligence (DNI) Avril Haines testifies before the Senate Intelligence Committee in Washington on March 10, 2022. The committee held a hearing on worldwide threats. Kevin Dietsch/Getty Images

The Office of the Director of National Intelligence released a document on July 6 warning state, local, and business leaders to be on the lookout for malign influence operations conducted by China’s ruling communist regime.

“For decades, a broad range of entities in China have forged ties with government and business leaders at the state and local levels of the United States, often yielding benefits for both sides,” the document (pdf) said.

“However, as tensions between Beijing and Washington have grown, the government of the People’s Republic of China (PRC) under President Xi Jinping has increasingly sought to exploit these China-U.S. subnational relationships to influence U.S. policies and advance PRC geopolitical interests.”

The document said that the threat to U.S. security did not come from China generally, nor from Chinese people living in America, but from the Chinese Communist Party (CCP), which covertly directed many of the seemingly local or regional outreach projects emanating from China, and which sought to gain leverage over American business and political communities.

China’s Outreach Organizations

Many such outreach efforts covertly sought to expand support for the regime’s interests and to create a friendlier attitude toward Beijing in Washington by creating a favorable image of the CCP among businesses and local leaders, the document said.

In this manner, the CCP sought to use state and local leaders as “proxies” to advocate for positions that the CCP thought to be to its advantage.

“Leaders at the U.S. state, local, tribal, and territorial levels risk being manipulated to support hidden PRC agendas,” the document said. “PRC influence operations can be deceptive and coercive, with seemingly benign business opportunities or people-to-people exchanges sometimes masking PRC political agendas.”

The document outlined how the CCP used financial incentives and soft power to convince or coerce American leaders into advocating for policies that would assist the CCP in its efforts at global expansion and ultimately undermine U.S. national security.

Specifically, the document explained how the CCP’s influence operations body, the United Front Work Department (UFWD), coordinated foreign influence operations in the United States and elsewhere.

The Confucius Institute of Indianapolis attended a parade in the streets of Indianapolis, Indiana, on May 28, 2011. The Confucius Institute is charged as an agency of the Chinese regime for its united front work. Robert Laberge/Getty Images

It cited the case of Christine Lee, a well-connected lawyer who fostered ties across the UK Parliament to lobby for pro-China positions. British intelligence later revealed Lee was a spy working for the UFWD to influence British policy in favor of Beijing.

Other state bodies, the document said, were not so easily distinguishable in their origins and governance.

Some, such as the Chinese People’s Association for Friendship with Foreign Countries, disguise themselves as civically-minded organizations while working to “malignly influence state and local leaders to promote the PRC’s global agenda,” the document said.

Still, others, such as the National Association for China’s Peaceful Unification, promote themselves as non-profit organizations while covertly seeking to promote policies that would allow for the CCP to forcibly unite Taiwan with China.

The document said that even more benign community-building efforts, such as the so-called Sister City programs, were used by the CCP to promote its ideology and political agenda.

Irvine, California, for example, entered into one such program with the Xuhui district of Shanghai in the early 2000s. As part of the obligations of the sister city deal, Irvine was formally required to disavow the existence of Taiwan and was barred by the CCP from displaying the flag of Taiwan or playing Taiwan’s national anthem.

The move caused fury among the city’s some 10,000 Taiwanese residents, and the deal was ultimately rescinded.

However, the document said similar policies were also implemented with sister city programs throughout Europe and Australia. And those agreements also required European and Australian cities to suppress information about the CCP’s political violence, including information about the 1989 Tiananmen Square protests and subsequent massacre.

Collecting Data

The document also warned that the CCP conducted massive data collection schemes through its subsidiary bodies, seeking to garner information on Americans and measuring who was favorably inclined toward China and how they could be used.

One example included a mass survey and study launched by a Chinese state university in coordination with the CCP, which “analyzed and ranked all 50 U.S. Governors’ attitudes toward China as friendly, hardline, or ambiguous, while also including their age, gender, political affiliation, work history, and states by economic size, geographic location, and level of trade with China.”

Notably, the document said that leaders and business owners should be wary of the possibility of CCP influence operations, no matter the size of their reach.

CCP strategy, it said, sought to play the long game, investing and building relations with small-time activists or local leaders in the hopes that one day those leaders would reach positions of national importance and be able to be leveraged for the benefit of the Chinese regime.

Creating Dependencies and Unwitting Agents

Often, the document said, local leaders might be unaware that their partnerships with regional or other outreach bodies in China were actually being centrally managed by the CCP.

Indeed, the CCP actively conceals its involvement in some cases, seeking to covertly create dependencies throughout the U.S. economic system. This allows it to exert greater pressure in world events, the document said, by controlling access to the market or needed resources, effectively granting the CCP the ability to extort American leaders into promoting Chinese communism.

The sign for Wall Street with U.S. flags outside the New York Stock Exchange in New York on June 16, 2022. Yuki Iwamura/AFP via Getty Images

“The PRC may view the U.S. business community as an especially important vector to influence local, state, and national leaders, given that companies are key constituents of and often contributors to politicians at all levels,” the document said.

“The PRC may use market access, investments, or economic dependency as leverage, and overtly press U.S. business leaders, particularly those with commercial interests in China, to lobby Washington for policies Beijing favors.”

Indeed, one congressional advisory body received expert testimony in April that numerous American CEOs, including Apple’s Tim Cook, should be required to register as agents of China, given their dedication to pursuing the CCP’s interests.

This dedication, allegedly, is driven primarily by fear of losing market access in China.

Perhaps the most poignant example of this was the Justice Department’s announcement in May that it was suing Stephen Wynn, the former CEO of Wynn Resorts, to compel Wynn to register as an agent of China’s communist regime.

The lawsuit followed an investigation that found Wynn personally sought to lobby former President Donald Trump to “cancel the visa or otherwise remove from the United States” a Chinese businessman and asylum seeker wanted by the CCP.

Wynn did this at the direct request of CCP leadership, the DOJ said, because he wanted to protect his Casinos in Macau, which China holds as a special administrative region.

Likewise, the document said, the CCP was already creating dependencies on China in many American communities.

“Understanding the scope and depth of the PRC government’s active role in guiding and often exploiting China’s subnational relationships overseas is the first step towards mitigating risks,” the document said.

“This geopolitical reality has placed state and local officials in the United States and other nations on the front lines of national security.”

See Something, Say Something

The DNI document urged American leaders and businesses to exercise vigilance when engaging with foreign entities.

There is no “free lunch,” the document said, and deals with Chinese entities that seemed too good to be true very likely were. As such, the document urged community leaders to conduct thorough diligence in understanding their partners, and to insist on transparency in all documents and agreements.

Moreover, the document encouraged leaders throughout American communities to engage with one another and share their experiences, as well as to maintain ongoing communication with local branches of the FBI and Homeland Security regarding any suspicious and questionable activities, or to educate themselves on the techniques used by the CCP to malignly influence activities in the United States.

“Beware of proposals that appear to run counter to democratic values or conflict with U.S. interests,” the document said. “Do not allow any foreign country to prohibit your interactions with other countries, entities, or individuals.”

“Set boundaries in the relationship and do not make exceptions simply to placate foreign customs.”

The advisory comes just one day after leaders from the U.S. and UK domestic intelligence agencies warned that the CCP is the greatest threat facing both nations.

“The most game-changing challenge we face comes from the Chinese Communist Party,” said MI5 Director General Ken McCallum.

“It’s covertly applying pressure across the globe. This might feel abstract. But it’s real and it’s pressing. We need to talk about it. We need to act.”