Pompeo urges U.S. state governors to be cautious in business with China

WASHINGTON (Reuters) – U.S. Secretary of State Mike Pompeo urged governors of U.S. states and territories on Saturday to adopt a “cautious mindset” when engaging in business with China, saying Beijing was seeking to use U.S. openness to undermine the United States.

In a speech to the National Governors Association in Washington Pompeo said China was pursuing a policy of exploiting U.S. freedoms to “gain advantage over us at the federal level, the state level and the local level.”

“When it comes to doing business, I’m asking you to adopt a cautious mindset. In the words of President Reagan, when you are approached for introduction or a connection to a deal, ‘trust but verify,’” he told the governors representing the 55 U.S. states and territories.

Pompeo, in his latest warning of what he sees as Beijing’s intentions, emphasized that competition with China was not just a federal issue.

“It’s happening in your states, with consequences for our foreign policy and for citizens that reside in your states … and affects our capacity to perform America’s vital national security functions,” he said.

Pompeo said the Chinese approach was organized and methodical, adding, “I’d be surprised if most of you in the audience have not been lobbied by the Chinese Communist Party directly.”

Beijing has denounced Pompeo’s comments targeting the ruling Communist Party as vicious attacks and said any attempts to smear China or obstruct its growth were doomed to fail.

Pompeo on Saturday said Chinese Communist Party friendship organizations had been established to expand Chinese influence in “Richmond; Minneapolis; Portland; Jupiter, Florida; and many other cities.” Chinese diplomats, he added, had sought to sway local elected officials on issues such as Taiwan, which Beijing sees as a renegade province.

He also referred to Chinese efforts to recruit scientists and professors at universities around the country to obtain technological know-how.

He spoke after U.S. prosecutors last month charged Charles Lieber, chair of Harvard University’s Department of Chemistry and Chemical Biology, with lying about participating in China’s Thousand Talents Plan, which aims to attract research specialists working overseas.

Even as the world’s two largest economies have taken steps to cool a bitter trade war, they remain far apart in many areas and Pompeo has been a particularly vocal critic of China on issues ranging from human rights to its push for dominance in next-generation telecommunications technology.