Consulting Firms Have Stumbled Into a Geopolitical Minefield
The era of free-flowing information is over.
By Henry Farrell and Abraham Newman
A sign for the U.S.-based McKinsey & Company management consulting firm is seen on a wall in Geneva, carved in a serif font in an expanse of gray stone on April 12, 2022. FABRICE COFFRINI/AFP VIA GETTY IMAGES
MAY 22, 2024
Earlier this year, McKinsey executives found themselves in serious political trouble. The Financial Times reported that their China branch had boasted in 2019 of its economic advice to the Chinese central government, while a McKinsey-led think tank prepared a book which advised China to “deepen cooperation between business and the military and push foreign companies out of sensitive industries.”
McKinsey, which had previously gotten media attention for promoting China’s Belt and Road initiative, responded with a statement saying that China’s central government had never to its knowledge been a client, and stressing its “75 year history of supporting the US government.” But the damage was done: Senior Republican policymakers called for McKinsey to be banned from tens of millions of dollars in federal contracts.
Once, information brokers like McKinsey could advise governments and share data across national borders with little controversy. Now, they are being forced to make hard choices—and not just by U.S. politicians. The Beijing branch of the Mintz group, a consultancy specializing in due diligence, was raided last year by Chinese authorities, which had apparently started worrying that accurate statistics about the Chinese economy were a national security threat. Bain, which provides detailed advice to corporations, was raided a month later.
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Once, information brokers and consultancies could advise governments and share data across national borders with little controversy. Now, they are being forced to make hard choices—and not just by U.S. politicians, Henry Farrell and Abraham Newman write.
Consulting Firms Have Stumbled Into a Geopolitical Minefield
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