“What’s really sad is that the average American investor is unknowingly financing the Chinese Communist Party,” says former Under Secretary of State Keith Krach. Americans inadvertently funded companies tied to China’s human rights abuses through American pension funds, university endowments, foundations, mutual funds, and bond portfolios.
What responsibility do Americans have to help stop the genocide of Uyghur Muslims in Xinjiang? What can the average American do that would actually make a difference?
In this episode, we sit down with former Under Secretary of State Keith Krach, who led the Trump administration’s Clean Network Initiative to keep vendors linked to the Chinese regime out of global 5G infrastructure. For this and other work, he was sanctioned by China.
Also joining us is former State Department official Ellie Cohanim, who served as the Deputy Special Envoy to Monitor and Combat Anti-Semitism.
The U.S. State Department has made a list of over 1,200 Chinese companies tied to the Chinese military, its mass surveillance system, or China’s military-civilian fusion strategy.
Jan Jekielek: Undersecretary Keith Krach and Deputy Envoy Ellie Cohanim, such a pleasure to have you both on American Thought Leaders.
Keith Krach: Thanks so much for having us.
Ellie Cohanim: Thank you.
Mr. Jekielek: I’ve been looking at your Newsweek op-ed, and it’s very powerful. “The Chinese Communist Party is Committing Genocide. Now. And You Can Stop It.” Fascinating reading and you cover a lot of really, really important points. Ellie, we’ll start with you. You say something that I’ve been very, very careful not to say, all these years—”This genocide against Muslims in China is shockingly reminiscent of the Holocaust.” Okay, so tell me how that can be.
Ms. Cohanim: Jan, first of all, it’s really a pleasure to be here with you on American Thought Leaders. Thank you for having us on. It is, indeed, carefully chosen words. Because as you know, I’m someone who is fighting anti-semitism on a daily basis. When you’re in this space, one item that we’re very careful about is any comparisons to the Holocaust. Sadly, in the popular culture, we see this done all the time, very casually. I have been someone who has voiced over and again asking people to please refrain from doing so.
However, we are now actually in a moment where the State Department in January, after an exhaustive process, identified the fact that there’s an actual genocide taking place being committed by the Chinese Communist Party against the Uyghur Muslims. I think we came to a point in history where we know clearly that there is a genocide taking place. It’s time for us to stand up against it.
One of the things that Jewish people ask themselves all the time after the Holocaust is how could the world have allowed such a thing to happen? How could the world have allowed the Nazis to perpetrate these atrocities against the Jewish people? The response that we’ve been given over and again is that the world didn’t know. In stark contrast, today, we know. And because we know, it becomes incumbent upon all good people to take action.
Mr. Jekielek: Ellie, something in the op-ed struck me as something very, very important, frankly. It’s these efforts, whenever the regime is doing a genocidal practice, there’s always this element of dehumanization of the target groups. I’m wondering if you could speak to that, please.
Ms. Cohanim: Jan, exactly right. The Nazis, part of what they did was they literally dehumanized the Jews in the eyes of Germans and then the entire European population. The best guess is that when you dehumanize a certain group, it becomes that much easier to then commit these atrocities against them. We’re seeing these exact same tactics practiced by the Chinese Communist Party, where they’re calling the Uyghur religion a communicable disease, a communicable plague.
I want to tell you their exact language. They describe the Uyghurs themselves as malignant tumors. They’ve described the Uighurs as being similar to weeds and that you must use chemicals to get all of them. This kind of language, again, is so incredibly reminiscent of the horrible language of the Nazis. Again, it’s the attempt to dehumanize the Uyghur Muslims, I imagine, so that it’s that much easier for the very many Chinese people who are involved in running these 380 concentration camps to do what is necessary to be done in order to systematically eliminate the Uyghurs, which is what’s taking place right now.
Mr. Jekielek: Undersecretary Krach, something that you highlight right at the outset, you say, “The moral imperative to end the Xinjiang genocide is bipartisan.” Of course, I wholeheartedly agree, but tell me why you’re highlighting this?
Mr. Krach: This is one of the most unifying bipartisan issues. That’s important to keep in mind. Speaker Pelosi said, “If we do not speak out against these human rights violations and genocide in Xinjiang because of some commercial interest, then we lose all moral authority.” Then Congressman Michael McCaul said, “We can’t sit by idly watching genocide, our silence will be complicit, and our action will be our appeasement.” Both administrations, and I think there’s such great power in that.
The Chinese Communist Party understands that. They also understand that the definition from the United Nations Convention on the prevention and punishment of genocide in 1948—it fits it to a T, and is punishable. It was on July 4 this last year, I was on TV and I called it genocide, because of all the horrific acts that the Chinese Communist Party is doing to Xinjiang.
That’s when I wrote a letter to all U.S. CEOs, all university governing boards, and followed up with all the civil society leaders. Our op-ed was really about taking it to the people, really about taking it to the citizens. It was about hitting the Chinese Communist Party where it hurts the most, and that is in the cash register, in the pocket book. Because they can hear that empty cash register all the way to Xinjiang. There’s a lot of people that are concerned about that, and they really wonder what they can do. That’s a big one.
Mr. Jekielek: Ellie, with the Convention on Genocide the 1948 convention, when a determination of genocide is actually made, that basically means that countries need to act, countries under the UN Charter need to act. This is not a casual thing by any means. What kind of action is expected?
Ms. Cohanim: We’re very pleased that yesterday, we saw an announcement from the Biden administration and the EU that sanctions were being placed on China. That’s exactly the right approach. The CCP can only understand strength. It’s really important for the U.S. to show strength in dealing with the Chinese government.
Also, I want to take a moment to distinguish between the people of China and the CCP. The people of China are being repressed, they’re being oppressed. They’re the most surveilled people in the world. I wonder how much the broad American audience understands what an average Chinese person is going through there. There’s no such thing as freedom in that country.
The Chinese Communist Party has proven over and again what authoritarianism is, and it is them. They are the world’s leader in authoritarian regimes. So that’s the average Chinese person’s experience. Then you drill down and you understand more about the human rights abuses that are waged against certainly the Uyghur Muslims, but also the Tibetans, really almost every minority, the Falun Gong.
Every minority group in China finds itself almost targeted for erasure. That’s the nature of this authoritarian regime. From a government perspective, these announcements of sanctions were exactly the right move by the U.S. and the EU. The reality is, though, because the Chinese threat is so great, I think those sanctions are just the beginning.
Mr. Jekielek: This is an unprecedented action right now, these new sanctions coordinated between the U.S., UK, the EU, and actually Canada, my home nation, which hasn’t been terribly active in these sorts of things for a while. Actually, this reminds me a little bit of some of the work you were doing not too long ago, Keith.
Mr. Krach: It’s very similar to the Clean Network Alliance of Democracies, and that’s really what it takes. That’s the magic formula. The Clean Network is comprised of like-minded nations, companies and civil society that operate by a set of trust principles. Clearly, genocide is the biggest violation you could ever imagine of that. There’s great power in that, and we proved that.
A year ago it looked like Huawei was unbeatable, and it looked like the Chinese Communist Party’s master plan for 5G was unstoppable. We stopped it with the Clean Network. Now there are 60 like-minded nations on the Clean Network. That represents over two thirds of the world’s global GDP, over 200 telcos, and dozens of clean companies. What that showed was “China Inc.” is beatable.
It also exposed their biggest weakness. Huawei’s 5G orders went from the 91 that they announced over a year ago down to probably about a dozen right now. So that formula works. It really works with genocide. This is such a positive development. Now we want to focus on bringing along some key constituents, the ones that we talked about in the op-ed.
We talked about the biggest asset managers in the world, companies like BlackRock. They talk a really good game. But in terms of really doing something about it, they haven’t done anything. The other community we talk about is the ESG community, and that’s environmental, social, and governance standards. That started out about 15 years ago, with about $17 billion that were under those standards. Today, it’s $17 trillion.
So that’s a powerful community. We haven’t seen them speak out [about it,] either. Then there are forums like the World Economic Forum, which is the preeminent gathering for government leaders and corporate leaders to uphold high social standards. They’ve never said anything about that. That gets back to what Speaker Pelosi talked about, are we not doing anything because of some commercial interests? That’s a polite way of saying conflict of interest. The question is, “Hey, are they too big to fail? Is there too much money on the table to really do anything about genocide?” That’s one of the things that Ellie and I really want to push.
Mr. Jekielek: When we were talking offline earlier, I took a note of this: you said, “If we’re going to shine the light on Xinjiang, we actually have to shine the light on ourselves as well, because these things are not independent of each other.” Why is it that these large bodies that we might expect to take a leading action because they’re looking at things like corporate social responsibility not taking an action on Xinjiang? Or the Chinese Communist Party?
Ms. Cohanim: Jan, I can’t speak to their motivations. But the reason why the former undersecretary and I have taken to writing this op-ed, to your airwaves, and to anyone who will hear from us, is because we know, first of all, that the American people are good people. And we know that the American people don’t want to repeat the mistakes of the Holocaust.
The greatest thing that we can do to honor the memory of the 6 million who were murdered by the Nazis is to make sure that it doesn’t happen again on our watch, in our generation, and that we can be models for our children and for our grandchildren and show them that we just won’t allow something like this to happen again in our lifetimes. So that when people look back into the future, they can say that the world did learn the lessons of the Holocaust.
That’s the reason why we’ve laid out a plan for the everyman and the everywoman. It’s not that difficult. It’s literally picking up the phone if you have a pension plan, you have a mutual fund in your retirement plans, or if you’re just generally invested in mutual funds. If you are involved as an alumna with your university in any way, you can call your university and talk to them about their university fund. You can call your mutual fund manager, you can call your broker.
It’s literally as easy as making phone calls and asking questions. The call to action right now is for every American to pick up that phone and call the fund managers and ask the question. I’m really confident that’s the first step and that a lot will be accomplished with even just that first step.
Mr. Jekielek: Keith, you yourself at one point were a CEO of a pretty sizable enterprise. So let’s say we’re not talking about that everyman here, let’s say we’re talking about people who are business leaders, perhaps presidents or CEOs of corporations. What can and should they do in this situation?
Mr. Krach: I believe nobody should bend a knee to the Chinese Communist Party. We clearly have the moral high ground here. I think pulling businesses out of that Xinjiang region is number one, but I also think in terms of investing in these companies. We put out a list of 1200 companies and subsidiaries at the State Department that either participate in Chinese military, civil fusion, human rights abuses, or the surveillance state. These are companies that should be divested from.
What Ellie was talking about in terms of asking your pension fund manager, in terms of asking your financial manager, in terms of if you donate to a foundation or a university endowment, you really want to find this out and put the pressure on them. Because genocide is going on right now.
That was the point of the op-ed, because we wrote it very close to the time of Holocaust Remembrance Day to honor the survivors and those who’ve passed as well, to never forget them and to honor them by preventing it in the future. It’s going on now. We failed to stop it last century. We really need to do something about it again. As Ellie and I say, when we say “never again,” we must mean it.
Mr. Jekielek: You were actually sanctioned minutes after the new administration took power. What has been the actual cost? What has been the impact of that?
Mr. Krach: It was interesting, because I was being interviewed on TV the day before the sanctions, the second to the last day of administration. They said, “Keith, you might get sanctioned.” I said, “Well, I am sure I already am.” A lot of people talk about it as a badge of honor. It is because of the results we got with things like the Clean Network and what we did in terms of our sanctions or financial sanctions, the things that I was responsible for. I don’t think anybody should bend a knee to the Chinese Communist Party. So, you know, so be it. My family and I can’t go to China, those kinds of things.
One of the big things was that this was a shot across the bow to the next administration, to folks like Secretary of State Blinken, to folks like Kurt Campbell who’s headed up a lot of the China stuff at the National Security Council. Because when you’re in a position and you’re dealing with a Chinese Communist Party, as we saw in Alaska this weekend, you can’t hesitate. These guys are going to come after us.
Now, I happen to think that they’re actually dealing from a position of weakness. Because as I traveled around 40 countries over the last few months, I could see that citizens of the world have woken up to the Chinese Communist Party’s three C’s doctrine—of concealment, corruption, and coercion. Citizens of the world now understand that the pandemic is a result of the concealment of the virus. Citizens of the world have seen that the evisceration of Hong Kong’s freedom is a result of that co-option of Hong Kong. Citizens of the world now understand and are beginning to hear about how the coercion in Xinjiang has grown into genocide, and these citizens don’t like it.
Mr. Jekielek: Ellie, maybe you can talk about this a little bit. There are these sanctions we were talking about earlier, coordinated across western democracies and the EU. The CCP, the Chinese Communist Party responded with something like—I heard someone say and I haven’t counted myself, so I can’t fact check this—but it was like four to one. For every one that was sanctioned in China, four officials were sanctioned in the EU. And that’s from all walks of life. That’s pretty fascinating because the EU not too recently was ready to sign a massive investment deal which to my eye looked like didn’t have a ton of accountability. So your thoughts.
Ms. Cohanim: Jan, I think the Chinese approach is disingenuous at best. They’re trying their best to fool the international community about what’s going on in China. They’re trying to point fingers elsewhere. First of all, to your point about sanctioning American officials and EU officials, the fact that former Undersecretary Krach was the third person on the list on the day that first round of sanctions was announced is truly a badge of honor. The undersecretary was able to then leave government knowing that he accomplished much. Anyone who gets “sanctioned” by China should understand that they’re doing good work, that they have been effective, because the Chinese are in essence coming after them.
But to talk a little bit about how the Chinese try to try to fool the world and spread this propaganda. The meeting that took place last week in Alaska with Secretary Blinken, when the Secretary of State of the United States was speaking exactly on our topic which is this genocide taking place in China, the Chinese diplomats, their retort was to talk about BLM riots in the United States. Any thinking individual knows there’s no comparison there.
I really would encourage any American who receives this kind of nonsensical response from Chinese officials in the future to really throw that right back at their face. Because we’re talking about punishable genocide, we’re talking about the most heinous human rights violations being committed by the Chinese Communist Party. There’s just no comparison to anything going on in this great United States of America. Anyone who would dare to say otherwise is just lying through their teeth. We can’t put up with that kind of nonsense.
Mr. Jekielek: You mentioned Keith, this bipartisanship. How best can this be moved along in a bipartisan manner, do you imagine?
Mr. Krach: So much is being done on Capitol Hill on that already. The resolutions have passed. I think that’s going great. Now we need to take it out and spread it out from there. It’s clearly in the executive branch right now. Our congressmen and women and our senators are interfacing with leaders all the time from around the world and their colleagues. So that is a big, big important area. Because I think that world has woken up.
The interesting thing about the Clean Network was that we exposed their biggest weakness—it was trust. The number one premise of the Clean Network is trust principles; it operates by trust principles. It’s things like integrity, reciprocity, transparency, respect for rule of law, respect for property of all kinds, respect for sovereignty and nation, respect for the planet, and respect for human rights.
What was interesting for me is in my first few months, I had about 60 bilaterals with my colleagues—foreign ministers, finance ministers, economic ministers and their deputies. When I asked them about China, “How’s your relationship going?” They would always go, “Well, you know, they’re important. They’re our number one, number two trading partner.” And then they looked both ways, and they’d lean in and say, “But we don’t trust them.”
And all I know is that trust is the most important word in any language. It’s the basis for every relationship, personal, business, or otherwise. That’s the thing. Nobody trusts the Chinese Communist Party. That is something that we can use to our advantage when it comes to things like the Chinese Communist Party perpetrating genocide or what they’re doing in terms of their surveillance state and all those other horrific things. This has formed now a movement and a foundation.
It’s really important to remember that it gets back to what Ellie was talking about in the Alaska meeting, and that is when you realize you’re coming from that position of weakness, you’ve got that insecurity. You’re cornered, you lurch out, and that’s what a bully does. A bully does things like sanction guys like me and everybody else for doing their job. All I know is when you confront a bully, they back down. And they really, really back down when you have your friends by your side. There is strength in numbers and there’s power in unity and solidarity. That security blanket is what made the Clean Network such a success.
Mr. Jekielek: Any final thoughts before we finish up?
Ms. Cohanim: Jan, I really just want to emphasize that for 76 years following the Holocaust, we’ve said, “never again.” We’re in a moment when we’re confronted with a situation where it’s the test of if we meant it and if we mean it. The reality is, it’s not too late. Today’s the day. People can take action. I encourage everyone to do so. I know that the American people want to. We want to really mean “never again. We want to mean it when we say it.
Mr. Jekielek: Give me a quick recap of what folks can do. I know you’ve already outlined a number of things in the episode, but maybe we can start with Ellie, and we can finish up with Keith. What can people do actively now?
Ms. Cohanim: First of all, educate yourselves. Just read about the atrocities. It’ll break your heart; it’ll bring you to tears. Second of all, I encourage everyone to pick up the phone. Please call every fund manager that you might have a relationship with, like your brokerage company. If you’re an alumni of a university, call your alumni office and talk to them about this issue. If you’re in a pension fund or basically any kind of fund that you might be invested in, because you don’t want to be invested in China Inc. Pick up that phone and demand transparency. If your broker or the fund representative is not willing to share information about where you’re invested, then it might be time to look elsewhere.
Mr. Jekielek: What about the larger scale for those folks that are running companies, nonprofits, and other organizations?
Mr. Krach: If you look at these big nonprofits and civil society, these are powerful voices to share it, to shout it from the mountaintop. A great example is the International Olympic Committee. They operate under the highest principles. And now we’re about ready to have the Olympics in 2022. That should really be up for debate.
If you look at the World Economic Forum, the gathering of all global CEOs and the government leaders—put it on the agenda, at least talk about it. These asset managers who can control trillions and trillions of dollars, this is the time, if they’re going to make a statement. They’ve done a great job on the environment, but when it comes to human rights, and let alone genocide, they haven’t done anything.
The whole ESG community is a powerful group, one that has a great human heart. They really have a powerful voice. For CEOs, make sure your supply chains are clean. For the financial institutions, it’s incumbent on you. You have a moral responsibility and a fiduciary duty to disclose if you’re invested in Chinese companies, particularly ones that are involved in the surveillance state, human rights abuses, and military-civil fusion. And especially if they’re involved in an emerging index fund, like the MSCI emerging index fund, or the FTSE emerging index fund, because these index funds have, as of last June, just added 250 Chinese companies into that mix.
What’s really sad is that the average American investor is unknowingly financing the Chinese Communist Party’s human rights abuses, surveillance state, and their military- civil fusion, and it’s buried in these index bonds which are then in all kinds of products, hundreds and hundreds of products, and in ETFs and in mutual funds. So the biggest thing is transparency. Once again, if we’re going to shine the light of transparency on Xinjiang, we’ve got to shine it on ourselves.
Mr. Jekielek: For example, could someone download this sheet of companies that are complicit in a lot of these violations and send it to their manager and say, “I want to be sure that none of these companies are in my fund.” Is that the sort of thing you’re suggesting?
Mr. Krach: Absolutely. Because there are 1200 companies and subsidiaries that are on the Pentagon list, and that’s for military-civil fusion. One of the things that I also recommended in my last press conference—there are 500 Chinese companies that are on the Commerce Department’s entity list. These companies are so bad, we’re not exporting any technology to them. And of those, only seven are on the Pentagon list. That’s one of my recommendations, a continuity of policy to actually fix that. I wish we would have had time to do that.
The Biden administration is going to be on that, and perhaps make it mandatory by putting it on the NDA, the National Defense Authorization Act. The other thing that we did on the fact sheet is we tracked these index funds, how many have divested from these companies. They’ve divested a few, but they have a long way to go. It’s good to keep the pressure on them and keep our eyes on them.
Mr. Jekielek: Deputy Envoy Cohanim, Undersecretary Krach, such a pleasure to have you on.
Ms. Cohanim: Thank you.
Mr. Krach: Jan, thanks so much for having Ellie and myself on, we appreciate this opportunity.
These interviews have been edited for clarity and brevity.