The global management consulting firm, McKinsey and Company, has been implicated in a controversy over its role in advising China on advanced technologies, contributing to the escalating tensions between the United States and China. This has led several US Republicans to call for a ban on McKinsey from federal contracts.
As reported by the Financial Times, McKinsey was instrumental in shaping some of the Chinese government's research for its 13th Five-Year Plan, spanning from 2016 to 2020. The firm discontinued its operations on the Urban China Initiative (UCI) in 2021 amid mounting pressure from the United States. Lawmakers have expressed concerns over potential conflicts of interest arising from McKinsey's consultancy work in China while simultaneously working with the US Department of Defense. The UCI was established by McKinsey in collaboration with Columbia University and Tsinghua University in 2011.
In a statement issued to the Financial Times, McKinsey clarified, "The Urban China Initiative was a non-profit initiative co-founded in 2011 with Columbia University and Tsinghua University. The Urban China Initiative is not McKinsey, and it did not perform work on McKinsey’s behalf. To our knowledge, McKinsey was not compensated for any UCI-related research or initiatives." The UCI made recommendations across 14 different technologies, including cloud computing.
Another report by the Financial Times reveals that two Republican lawmakers have called for a ban on McKinsey securing federal contracts within the United States. Michael McCaul, chair of the House foreign affairs committee, and Marco Rubio, vice-chair of the Senate intelligence committee, argue that McKinsey's actions have compromised US security. Bob Sternfels, global managing partner at McKinsey told Congress he was unaware that his firm had ever worked for the Chinese central government. Rubio told the Financial Times that "McKinsey appears to have lied multiple times about its relationship with the Chinese Communist party." Since 2008, McKinsey has secured over $1 billion in contracts from the US federal government.
