While the U.S. government strengthens its defenses against Chinese interference, Beijing is circumventing these efforts by leveraging the separation of powers between federal and state governments.

Recent federal initiatives to counter potential Chinese threats, such as restricting investments in U.S. farmland, haven’t fully addressed China’s primary influence tactic.

A new Foundation for Defense of Democracies (FDD) report, released Tuesday, highlights China’s subnational engagement in the U.S. as the key driver of its influence across various sectors.

The report concludes that China’s influence at the state and local levels surpasses that of any other foreign power, even exceeding the Soviet Union’s influence during the Cold War.

This influence is achieved by focusing on state and local relationships through contracts, programs, investments, and acquisitions that stimulate local economies and create jobs.

The report notes that state and local governments prioritize economic development and employment over security concerns, a point highlighted by a 2019 Xinhua report showing active Chinese-U.S. local government cooperation despite the ongoing trade war.

The FDD report finds that this pro-Beijing attitude persists among state leaders from both parties.

The report emphasizes an asymmetry in the U.S. federal system: national authorities handle security and trade, while state and local authorities focus on public goods and economic development. This allows subnational Chinese influence efforts, particularly investment, to bypass national-level security mechanisms.

Examples cited include California Governor Gavin Newsom’s visit to China and meetings with President Xi Jinping, and Arkansas Governor Asa Hutchinson’s 2018 endorsement of subnational cooperation with China.

Governor Hutchinson stated that while the federal government handles foreign policy and trade, strong state-level relationships contribute to national success.

However, the FDD report argues that this approach leaves the U.S. vulnerable to Chinese interference in various sectors, including trade, investment, technology, education, media, and research.

The report calls for a more coordinated national approach to address China’s influence efforts, noting the lack of coordination in current U.S. policy.

The FDD experts contend that China strategically targets state and local actors, not only for economic gains and cultural programs, but also to shape national narratives.

Nathan Picarsic, an FDD senior fellow and report co-author, states that the Chinese Communist Party (CCP) exploits weaknesses in U.S. defenses, creating a united front that extends its influence globally. State, local, and commercial avenues enable Beijing to circumvent Washington’s increasingly stringent measures.

Picarsic concludes that effectively countering the CCP’s global influence requires addressing its presence within the United States.

Digital reached out to Governor Newsom and former Governor Hutchinson for comment.