The US Government Has No Clue How Much Taxpayer Money Is Flowing Into China

Data on US funding for CCP-tied entities are 'incomplete and sometimes inaccurate'

Xi Jinping (Feng Li/Getty Images)
April 14, 2023

The U.S. government does not know how much taxpayer money is being funneled to China each year due to "incomplete and sometimes inaccurate" data, according to a federal watchdog report.

The American government from 2017 to 2021 allocated at least $48 million for partnerships with Chinese Communist Party-controlled entities, including more than $10 million for China's Center for Disease Control and Prevention, which played a central role in misleading the world about the origins of the coronavirus. But "the full extent of this funding remains unclear," according to a report by the U.S. Government Accountability Office, the government's top watchdog group.

Much of this money was awarded by the U.S. National Institutes of Health (NIH) to Chinese universities and government-controlled research centers. Partnerships at these institutions have been under the congressional microscope since the start of the coronavirus pandemic and the determination that the virus likely leaked from a Communist Party laboratory that received U.S. funding. Michael Sobolik, a veteran China analyst and fellow at the American Foreign Policy Council think tank, said the federal government should be increasing its efforts to account for every taxpayer dollar sent to China and CCP-linked entities.

"It's standard practice for U.S. government contractors to not report small subawards. That makes sense generally, but it presents some problems in the China context," Sobolik said. "Washington owes it to the American taxpayer to account for every dollar spent within the borders of our greatest geopolitical adversary."

Peking University, which maintains a partnership with the Communist Party's defense industry and nuclear weapons program, received nearly $6 million from the U.S. government during the years covered by the report. "Peking also conducts classified work on semiconductors, satellite communications, flight propulsion, and computer science," the Washington Free Beacon reported in 2021.

Other CCP schools, including Wuhan University, Fudan University, and the Chinese Academy of Sciences, received six-figure cash awards from the U.S. government over the course of the four years tracked in the report. This funding in particular could raise red flags since Chinese schools feed the Communist Party's military sector, including its spy operations and research on advanced weapons.

At least 15 Chinese universities "have been implicated in cyberattacks, illegal exports, or espionage," according to the Australian Strategic Policy Institute.

More than $809,000 was also awarded to individual Chinese recipients, whose identities are not disclosed.

All told, "U.S. agencies reported obligating approximately $22.8 million through assistance awards and approximately $25.2 million through contracts," according to the report.

Federal investigators found that entities receiving U.S. cash often did not report smaller expenditures in China, which makes it difficult to pinpoint overall funding figures. U.S. companies that receive federal funds, for instance, can contract with entities located in China. Those figures are not tracked, according to investigators who worked on the report, who said they found inconsistencies in the reporting of these expenditures.

Funding data are also incomplete because subawards under $30,000 do not need to be reported back to the federal government, meaning that the primary recipients of U.S. dollars are not required to tell the government about limited spending in China. Because of these guidelines, "the full extent of such funding [to China] is unknown because of limitations related to the completeness and accuracy of subaward data reported in government systems." Essentially, as federal money got channeled further down the chain, reporting on how it was spent and where it went became less clear.

Around 94 percent of the federal funds that were awarded to China came from NIH, the U.S. Centers for Disease Control, and the State Department, according to the report.

The State Department, for instance, paid $4.3 million to "a company in China to obtain internet services at the U.S embassy and consulates throughout mainland China."