China is engaged in aggressive influence and financial operations inside the United States as part of Beijing’s program to obtain Western technology and influence American policies, Secretary of State Mike Pompeo said this weekend.

Speaking to a conference of the National Governors Association in Washington, Mr. Pompeo outlined a multipronged effort by the Chinese Communist Party to influence state governments.

“At the end of the Cold War, America started to engage with China heavily,” he said. “We thought that the more we interacted, the more [China] would become like a liberal democracy, like us here in the United States. It didn’t happen, and you all know this.

“Indeed, under [Chinese Communist Party General Secretary] Xi Jinping, the country is moving exactly in the opposite direction — more repression, more unfair competition, more predatory economic practices; indeed, a more aggressive military posture as well,” the secretary of state said.

The speech by Mr. Pompeo is part of a series of presentations on the threat posed by China. Earlier speeches focused on warning Silicon Valley tech companies not to bolster China’s military and urging Hollywood to avoid allowing China to politicize its products by presenting the Communist Party-ruled state as a benign power.

In his remarks Saturday, Mr. Pompeo said he recently was invited to attend a meeting of governors by a Chinese government front group that promised “an occasion for exclusive deal-making.”

The meeting was co-hosted by the National Governors Association and a Chinese front group called the Chinese People’s Association for Friendship With Foreign Countries.

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

The United Front Work Department is an intelligence agency within the Communist Party of China in charge of foreign influence operations.

The secretary said he was familiar with the operations of the group from his time as CIA director and that the Chinese were seeking to co opt U.S. officials and business leaders by offering Chinese investments in their states, in pension funds or in industries related to sensitive national security matters.

“These aren’t hypotheticals,” he said. “These scenarios are all too true, and they impact American foreign policy significantly.”

Chinese diplomats are covertly attempting to coerce local governments into withholding support from rival officials from Taiwan.

In one case, a Chinese consul general in New York sent a letter to a speaker of the State Assembly telling him to “avoid engaging in any official contact with Taiwan, including sending congratulatory messages to the electeds, introducing bills and proclamations for the election, sending officials and representatives to attend the inauguration ceremony, and inviting officials in Taiwan to visit the United States.”

The pressure campaign was an attempt to force an elected American official to give up his right to freedom of speech.

“And this isn’t a one-off event. It’s happening all across the country,” said Mr. Pompeo, noting activities by Chinese consulates in New York, Illinois, Texas, and California.

In another case, Chinese Consulate officials paid students at the University of California, San Diego to protest a visit by the Dalai Lama, the Tibetan spiritual leader.

Mississippi Gov. Phil Bryant, a Republican whose term ended early this year, received a letter from a Chinese diplomat based in Houston warning that Beijing would cancel investment if the governor traveled to Taiwan.

“Phil went anyway,” Mr. Pompeo said.

‘China’s … strategic intentions’

At the local level, Mr. Pompeo said, Communist Party officials have sought to cultivate relations with local school board members and local politicians through sister cities programs.

Other programs include China’s “Thousand Talents” effort and Confucius Institutes. The first is designed to obtain sensitive technology, and the institutes use Chinese propaganda to try to influence universities and other schools.

Recent federal investigations involving U.S. educators covertly working for China led to prosecutions of professors at the University of Kansas, Virginia Tech and Harvard University.

An investigation at Texas A&M University uncovered more than 100 academics working for Chinese recruitment plans.

Mr. Pompeo noted that China’s exploitation of the open and free U.S. system is not reciprocated with similar access by Americans in China.

“President Trump has talked about reciprocity in trade. We should have reciprocity in all things. Today they have free rein in our system, and we’re completely shut out from theirs,” he said.

Mr. Pompeo urged the governors to exercise caution before doing business with China and to “trust but verify” all interactions.

On Chinese investment in U.S. state pension funds, Mr. Pompeo said the Florida Retirement System was found to be invested in a Chinese company linked to surveillance gear used in the repression of more than 1 million Muslim minorities in China.

“California’s pension fund, the largest public pension fund in the country, is invested in companies that supply the People’s Liberation Army that puts our soldiers, sailors, airmen and Marines at risk,” Mr. Pompeo said.

In the Washington area, Mr. Pompeo said, there are concerns that Metro fare cards made in China could be vulnerable to cyberthreats.

The federal government has bolstered the review process for Chinese companies investing in states and visas have been revoked for fraudulent Chinese researchers at universities, he said.

A Chinese government think tank recently conducted an assessment of all 50 U.S. governors and their views toward China and labeled each one either “friendly,” “hard line” or “ambiguous.”

The Chinese are seeking to influence local governments as well.

“It’s happening in your states with consequences for our foreign policy, for the citizens that reside in your states and, indeed, for each of you,” Mr. Pompeo said. “In fact, whether you are viewed by the [Chinese Communist Party] as friendly or hard line, know that it’s working you, know that it’s working the team around you.”

The activity “affects our capacity to perform America’s vital national security functions.”

The problem does not mean that the United States should not do business with China, he said, noting the recent partial trade deal with Beijing.

Mr. Pompeo said the United States is providing $100 million in aid to China and other nations affected by the deadly Wuhan coronavirus.

“But while there are places we can cooperate, we can’t ignore China’s actions and strategic intentions,” he said.

China’s government has methodically analyzed the U.S. system and has “decided to exploit our freedoms to gain advantage over us at the federal level, the state level, and the local level,” he said.

Elements used by the Chinese Communist Party included “friendship” organizations based in Richmond, Virginia; Minneapolis; Portland, Oregon; Jupiter, Florida; and many other U.S. cities.

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