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McKinsey’s relationship with China allegedly fed US tensions

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A think tank led by consulting giant McKinsey & Company recommended China push foreign companies out of sensitive industries as part of a project for the Communist regime nearly a decade ago — setting the stage for increased tensions between Beijing and Washington, according to a stunning new report.

The think tank, the Urban China Initiative, produced a 310-page book in 2015 that suggested the central government secure the country’s position as a technological powerhouse and reduce its reliance on global tech imports, The Financial Times reported Friday.

Among the recommendations was the “Made in China 2025” policy, which advised the government to deepen cooperation between business and its military, according to a review of the work that has not previously been reported in western media obtained by FT.

McKinsey has faced criticism from US lawmakers for having contracts with the US Department of Defense as well as Chinese-owned enterprises. The consulting firm has denied any wrongdoing. ZUMAPRESS.com

The book, titled “Scientific and Technological Revolutions around the World,” featured a foreword by Lola Woetzel, one of McKinsey’s most senior staffers based at the firm’s Shanghai office.

Commissioned by the National Development and Reform Commission, the book formed part of the Chinese government’s research for its 13th Five-Year Plan, from 2016 to 2020.

In all, “Scientific and Technological Revolutions around the World” made 61 recommendations across 14 different technologies.

In her foreword, Woetzel wrote, according to FT: “Drawing on research of the McKinsey Global Institute and the Urban China Initiative, we hope this book provides useful input for the planning and development of China’s technology enterprises and government institutions. We believe there is great potential for China’s science and technology in the years to come!”

The government eventually adopted several of the policies, including the “Made in China 2025” strategy, which called for creating global market share targets for vital industries — including robotics, aerospace and new energy vehicles, FT reported.

The moves pushed then-President Donald Trump to launch a trade war against Beijing, ratcheting up tensions that continue to this day.

The Urban China Initiative book featured a foreword by Lola Woetzel — who’s among McKinsey’s most senior staffers based in the firm’s Shangai office — and formed part of the Chinese government’s research for its 13th Five-Year Plan.

The New York-based firm shut down the think tank in 2021 and has attempted to minimize its tied to Beijing — as US lawmakers raised concerns that the consulting work conflicted with its contract with the US Department of Defense.

McKinsey’s global managing partner Bob Sternfels tried to dismiss those fears during a congressional hearing earlier this month,

“We do no work, and to the best of my knowledge never have, for the Chinese Communist party or for the central government in China,” Sternfels said.

“The vast majority of work that we do in China is for multinational companies. Many of those are US companies and private sector Chinese companies.”

The Post reached out to McKinsey for comment.

After the FT story broke, the consulting firm shared a statement on its website that it “stands by our prior statements regarding our work in China.”

It also insisted that the think tank “did not perform work on McKinsey’s behalf.”

The book in question is titled “Scientific and Technological Revolutions around the World.”

Rather, the UCI “was a non-profit initiative co-founded in 2011 with Columbia University and Tsinghua University,” the company said.

Per FT’s report, McKinsey was part of the UCI’s launch more than a decade ago — during a different geopolitical climate — along with its university partners.

McKinsey partnered with Chinese public institution Tsinghua University in 2017 to launch the Digital Capability Center in Beijing, which was designed to “help companies harness the powerful emerging technological changes…that are disrupting industries across the world,” per a news release on McKinsey’s website.

The McKinsey & Company-led think tank, reportedly contributed to a book commissioned by the Chinese government that recommended how the country could secure its spot as a global technological leader. REUTERS

McKinsey has made at least $450 million from its work for the Defense Department since 2008, FT reported, citing a government database.

According to an NBC investigation around the time McKinsey ditched the UCI, the global firm’s contracts with the federal government gave it a confidential, insider’s view of US military planning, intelligence and high-tech weapons programs.

However, McKinsey simultaneously had contracts with Chinese state-run businesses that supported Beijing’s naval buildup in the Pacific and played a key role in China’s global efforts to extend its influence, NBC reported.

Though McKinsey was never alleged or charged with damaging US national security, lawmakers criticized the firm for having opposing alliances with the US and China.

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