Keith Krach: Making sure Americans aren’t unknowingly financing China
In this January 2021 interview with Fox’s Liz Claman, Keith Krach discusses the need to protect American investors from unknowingly financing China’s military, surveillance state, and human rights abuses.
Krach also shares his reaction to being sanctioned by China.
Liz Claman: Treasury Secretary Janet Yellen’s sort of approach to China… Not going to be much different–at least it sounds like it–to what the Trump administration is. She said, "China is a threat. It poses it to the United States and that there have been real problems and that needs to be dealt with." This is something that’s been echoed by many of the top minds in the intelligence community as well. National Counterintelligence and Security Center Director Bill Evanina telling Fox News exclusively, quote, "No country poses a broader, more severe intelligence collection threat to America than China.".
Joining us now is the outgoing US Under Secretary of State for Economic Growth, Energy and the Environment, Keith Krach. Keith, great to see you. You’ve just got a few more hours here. We’re guessing both those comments resonated with you. Now, the Trump administration tough on China till the bitter end. Just yesterday, it revoked Intel’s licenses to distribute products to Huawei the telecom giant. Is Intel the only one? And what’s at the heart of that move?
Keith Krach: Yeah, you know, Liz, they lifted restriction on some low technology to keep some of the businesses going so they can invest in R&D. But if you look at overall what has happened, we’ve really clamped down on providing them the technology as well as the financial capital.
And this is a key part of our our national security. And, you know, for example, most Americans have no idea that their own money held in pension funds, 401k’s, brokerage accounts is financing not only the CCP’s military, but also their surveillance state and their human rights abuses through an undisclosed, opaque web of subsidiaries, index funds and financial products.
Liz Claman: Well, yeah, I mean, the Uighurs, the Muslim minority, have been treated, just absolutely horrifically–put in sort of mind cleansing camps and things like that, but you talk about how pension funds may be unknowingly invested in some of these names. You and your office specifically put together forty-four names we can put them on a scroll here to show people. But everything from Xiaomi, Grand China Air, China National Aviation, Commercial Aircraft, China Railway, Panda Electronics Group. These are the forty-four stocks that were trading here that the administration said, nope, you can’t own these anymore. Why, what was it that you specifically found within them that they had to be taken off and that includes the three telecoms that were delisted from the NYSE.
Keith Krach: Well the all these companies are involved with the Chinese military. They were listed by the DOD. So, you know, we put export controls on on companies like this, but we’ve been financing them for years. This is just a lack of continuity of policy. So, you know, I think we’ve come a long way in shaping that up. We still have a longer way to go. And so these are also the same companies that enable the surveillance state would enable human rights abuse. Now, in the National Defense Authorization Act of 1999, it was asked to list these companies. We just got for whatever reason, United States just got around it to this year. It’s given the Chinese twenty years to do some what I call four step thing. The first thing they do is they’ve broken these companies into an unnatural amount of subsidiaries. You would never see this in the normal world, hundreds and hundreds.
So the purpose for that is to disclose, confuse and deceive. And then they’re buried in the index funds a little bit here, little bit there. Then they’re buried into literally hundreds of products, ETFs, and then they’re in the pension funds. And so if you’re an average American investor, you don’t know it’s in your mutual fund, you don’t know it’s in your pension fund. And it’s long overdue Liz.
Liz Claman: Well, Keith, but China’s a double edged sword. Obviously, there are threats there, but there are businesses, publicly traded, of stocks our viewers own who understand that they want to protect themselves, but they also want to tap the Chinese consumer and just conduct commerce. Is there a way to continue to do that from where you sit?
Keith Krach: There absolutely is Liz. And it’s it’s you know, you’ve got to be able to walk that line. But these companies in particular, these 44 companies who, by the way, also on that fact sheet have about twelve hundred subsidiaries that we listed. These are companies who were financing their next aircraft carrier. Were financing ICBMs someday that will be pointed at our family’s home. So we really I mean, we really needed to stop this.