China's Next Target: Your Financial Data

USA and China flag on coins and stock market chart .It is symbol of economic tariffs trade war and tax barrier between United States of America and China.

Written by: Morgan Ortagus

Published by: The Washington Examiner |

As spy balloons soar over Midwest neighborhoods and intrusive apps such as TikTok send terabytes of personal data to servers in mainland China, Beijing is making known its hunger for America’s most personal and private secrets. It should come as no surprise, then, that China has opened a new front in its cold war against the United States, and it is doing it with the help of some U.S. companies.

During the Cold War, national security threats were aligned along a single dimension: the battlefield. NATO and the Warsaw Pact scrimmaged to gain control of critical realms in the air, space, sea, and land. Moscow’s obsession was American strategic nuclear forces, NATO’s posture in Western Europe, and the perceived weaknesses of democratic political systems. It was in these realms that most of its resources were committed.

China is a thornier problem. Beijing’s aggressive expansion has permeated every corner of American society. It is buying up farmland in the Dakotas, ports on the West Coast, and coal mines in Tennessee. Capital from Shanghai, Shenzhen, and Hong Kong is pouring into our colleges and universities.

Exciting Tom Clancy tools such as spy balloons may capture our attention, but China uses far more subtle techniques to capture our secrets. Every time an American teenager clicks open an app such as TikTok, for example, private data pours from his or her phone and into servers headquartered in Beijing. The latest battlefield is your wallet.

The Shanghai-based UnionPay is a titan in the credit card industry and now is the largest debit card processor in the world. While UnionPay is nominally a private company, the truth is it’s a state-controlled subsidiary of the Chinese Communist Party.

Most Americans would be properly skeptical of signing up for a credit card sponsored by the CCP. The risks of using TikTok or a Huawei server for internet or cellular service are well known. The risks of swiping a purportedly American credit card are not.

Consider that two American payment giants, Discover and Fiserv, are partnering with UnionPay. Last year, Fiserv announced it would help UnionPay “grow on a global scale.” Li Xiaofeng, CEO of UnionPay International, said, “With Fiserv technology, UnionPay has improved its service capabilities for partners outside the Chinese mainland.”

Discover’s partnership goes back much further: Since 2005, Discover has taken part in a “landmark alliance between China UnionPay and Discover Financial Services.” David Nelms, then CEO of Discover, said: “This strategic alliance between China UnionPay and Discover Financial Services expands the links between the growing Chinese consumer economy and the U.S. market.”

No doubt that these firms would say that U.S. data are secure and there are safeguards in place to prevent data sharing. But as we learned from TikTok and Huawei, both exponents of the CCP and both companies that offer similar dubious assurances, nothing is safe.

The risk represents predatory lending on a new, global scale. UnionPay has fast become the largest debit processor in the world and is expanding at a stunning rate. The menace posed by China owning or sharing vast sums of America’s personal debts would represent both a ticking time bomb and a profound national security threat.

With this partnership in place, credit cards could become a plastic TikTok. Swipe or tap at the register for an extra whip latte at Starbucks and Beijing will know it.

Year after year, China harvests petabytes of private data from the American public and will soon pair this massive electronic hoard with sophisticated artificial intelligence. If a war were to break out between the U.S. and China, this lethal combo could be leveraged in painful ways, from draining the bank accounts of the U.S. middle class to creating precise profiles of our military leaders. The last thing U.S. firms should be doing is helping Xi Jinping’s government stretch its tentacles further into our homes and bank accounts.

Our daily expenditures and kitchen table budgets represent the crown jewels of our privacy. To allow the most intimate details of our lives, from the gifts we buy our family to the donations we make to charity, to fall into the hands of an adversary would represent a failure of the U.S. government’s most fundamental obligations. Congress knows this but waited too long to block other predatory CCP entities such as Huawei and TikTok. It should not make the same mistake with UnionPay.

And regardless of whether Congress acts to limit UnionPay’s access to U.S. data, American firms should be ever cautious about partnering with the CCP and its corporate affiliates.

Morgan Ortagus is the founder of Polaris National Security and a former State Department spokeswoman.