Pompeo Warns Governors to Be Wary of China’s Economic Overtures

WASHINGTON –  Secretary of State Michael Pompeo delivered a stern warning about China in a speech to governors on Saturday, warning that Beijing is using economic promises as a wedge to exploit U.S. vulnerabilities.

“The competition with China is not just a federal issue,” Pompeo said in a speech at the bipartisan National Governors Association winter meeting in Washington. “It’s happening inside your state and it affects our capacity to perform American’s vital national security functions.”

“What I’m asking of you is that you adopt a cautious mindset,” the secretary continued from a stage in the grand ballroom of the Walter E. Washington Convention Center.

“In the words of President Ronald Reagan, when you are approached for introduction or a connection to a deal, ‘trust but verify,'” he said.

Pompeo began his remarks by recalling an invitation he received last year from a former governor to attend an “occasion for exclusive deal-making” with entities based in China.

“The invitation said ‘the opportunities for mutually beneficial economic development between China and our individual states are tremendous,'” Pompeo said. “Frankly, it sounded like something that might’ve come from President Trump.

“What I was being invited to was the U.S.-China Governor’s Collaboration Summit. It was an event co-hosted by the National Governors Association and something called the ‘Chinese People’s Association for Friendship With Foreign Countries.’ Sounds pretty harmless,” the secretary said.

“What the invitation did not say is that the group I just mentioned is the public face in the Chinese Communist Party’s official foreign influence agency, the United Front Work Department,” he said.

Pompeo said he was lucky. He was familiar with the department from his tenure as President Trump’s first CIA director. As a result, he knew the department gathered intelligence on and attempted to influence elite individuals and organizations, and reported its intelligence directly to the central committee of China’s Communist Party.

“My experience got me thinking … how many of you make the link between that group and the Chinese communist party?” he said. “What if you made a new friend while you were at that event? Did that new friend ask you for introductions to other politically-connected and powerful people? Did they offer to invest money in your state, perhaps in an industry sensitive to our national security?”

Pompeo assured the governor’s he was not trafficking in hypotheticals. In fact, he told them, a Chinese government-backed think tank last year produced a report that assessed all 50 U.S. governors and their attitudes toward China.

“They labeled each of you, ‘friendly,’ ‘hard line,’ or ‘ambiguous.’ You can all decide where you think you belong. Someone in China already has. Many of you, indeed, are referenced by name in that report,” he said.

The revelation did not elicit a single murmur in the room, but Pompeo was undeterred.

“Regardless of whether the Chinese Communist Party sees you as friendly or hard line, know that it is working you, and know that it is working the team around you,” he said.

Pompeo’s speech was an iteration of the “beware of China” theme he’s sounded elsewhere, most recently on Jan 30, during an appearance with the British Foreign Secretary Dominic Raab in London.

China’s Communist Party is “the central threat of our times,” he said then.

As he spoke Saturday, Pompeo emphasized his connections to many of the governors in attendance.

He was no stranger to most in the room and is a friend of many, having traveled inside the U.S. almost as often as overseas.

“It’s something secretaries of state generally don’t do as much, but I think it’s important that the American people understand what our diplomats are doing around the world and why we’re doing it,” Pompeo said.

“So if you see me in your state, I’m not lost,” he quipped. “I know your state has not seceded from the Union. I know where I am.”

In the spirit of kinship, Pompeo assured the governors “we can find places to cooperate [with China] when our interests converge.”

As examples he pointed to the recent partial deal the U.S. reached with China and the Trump administration’s shipment of 18 tons of medical supplies to China to help it deal with the coronavirus outbreak.

Despite these examples, Pompeo said “We can’t ignore China’s actions and strategic intentions.”

“They’ve analyzed our system and assessed our vulnerabilities and decided to take advantage of our freedom to gain advantage over us at the federal, state and local level,” he said.

“It’s happening. It’s happening in your state. In fact, I would be surprised if most of you in the audience had not been lobbied by the Chinese communist party directly,” Pompeo continued. “That’s why I need your help. What China does in Topeka, Kansas or Sacramento, California, reverberates in Washington.”

The secretary urged the governors to be vigilant and to scrutinize their states’ ties to China.

He noted, for instances, that the Florida retirement system has invested in a company that makes the surveillance equipment the Chinese government uses to track the nation’s Muslim minority.

“California’s pension fund, the largest public pension fund in the nation, is invested in companies that supply the people’s liberation army. … something that puts our soldiers, sailors, airmen and Marines at risk,” he said.

“And right here in the District of Columbia, concerns have been raised that the new Metro rail cars manufactured in China could be vulnerable to cyber threats,” he said.

Pompeo concluded by saying he knows none of the governors would knowingly make a deal with China that undermines U.S. national policy, but he advised them to keep the federal government in the loop when making economic development and other deals with China.

“There are federal officials prepared to help you work your way through these challenges when they arise,” Pompeo said. “Let us help you make sure we’re getting it right. We’re here to help.”