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Urban China Initiative (UCI)

Website:

www.urbanchinainitiative.org/
Type:

Think Tank
Location:

Shanghai, China
Formation:

2011
Status:

Likely Defunct
Founder:

Lola Woetzel

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The Urban China Initiative (UCI) was a think tank based in Shanghai, China, focused on urban policy that was founded in 2011 and likely went defunct around 2021. 1 As of June 2024, its website is no longer operational. 2

In 2015, UCI presented research to the Chinese government with policy recommendations on how to accelerate Chinese technological development to make the nation more globally competitive. Public revelations of this research have brought criticism and controversy to the American consulting firm McKinsey and Company. McKinsey has publicly disputed reporting on its alleged links to UCI despite the Financial Times’s claims that UCI shared staff, personnel, and an office with McKinsey. 3

Origins

The origins of the Urban China Initiative are disputed. According to many sources, including OnThinkTanks.org and the Financial Times, UCI was co-founded and managed by McKinsey and Company in cooperation with Columbia University and Tsinghua University in China. 4 5

According to the Financial Times, UCI was established to develop policies regarding urban issues for the Chinese government and to develop connections between McKinsey and the Chinese government. The Financial Times claims that UCI was founded and co-chaired by Lola Woetzel, a senior partner at McKinsey Shanghai. Several UCI employees explicitly referred to the organization as being part of McKinsey or an “initiative” of it, according to the Financial Times report. Some of these employees also listed themselves as employees of McKinsey on LinkedIn. UCI’s office had the same address as McKinsey’s official office in Beijing, China. The Financial Times also claims that UCI was shut down by McKinsey in 2021. 6

After the release of the Financial Times report, McKinsey released a public statement disputing the alleged connection to UCI. According to McKinsey, the Urban China Initiative was co-founded in 2011 with Columbia University and Tsinghua University and had no formal connection to McKinsey. The statement claims that UCI “did not perform work on McKinsey’s behalf. To our knowledge, McKinsey was not compensated for any UCI-related research or initiatives.” 7

Relationship with the Chinese Government

In December 2015, the Urban China Initiative presented a 310-page book authored by the organization entitled, Scientific and Technological Revolutions around the World, to the National Development and Reform Commission (NDRC), an agency within the Chinese government. A copy was personally presented by UCI founder Lola Woetzel to then-Premier Li Keqiang, who was the second-highest ranking member of the Chinese Communist Party at the time. In the book’s forward, Woetzel states that its contents were based “on research of the McKinsey Global Institute and the Urban China Initiative” 8

The book provided “a road map to the opportunities for China’s science and technology development” by outlining how the Chinese government and society could encourage the development of 14 key technologies, including cloud computing, 3D printing, and electric vehicles. The book’s policy recommendations are explicitly designed to help China catch up to the West economically. 9

According to a February 2024 article in the Financial Times, NDRC provided key input to the Chinese government’s then-current five-year plan outlining its high-level economic goals and policies. The Chinese government has stated that “the famous American consulting firm McKinsey” contributed to its development. The Financial Times also claimed that some of UCI’s specific suggestions, such as that the Chinese government should use industrial policy to develop more key technology components domestically, encouraged the China-U.S. trade war during the Trump administration. 10

Controversy

The Urban China Initiative’s contributions to the National Development and Reform Commission and China’s five year plan have led to criticism of McKinsey and Company, primarily from Republican lawmakers and right-leaning pundits, who claimed that McKinsey was profiting from international conflicts, aiding America’s enemies, and had a conflict of interest given its role as a contractor for the U.S. Department of Defense. 11 12

In May 2024, U.S. Senator Marco Rubio (R-FL) posted to X/Twitter: “We have the 300-page book @McKinsey wrote to help Communist China dominate the United States. Sent a letter with Senator Hawley promising to eliminate all McKinsey’s government contracts.” 13

Gabriel Noronha, a former special assistant for the U.S. Senate Armed Services Committee under former Sens. John McCain (R-AZ) and Jim Inhofe (R-OK), described McKinsey’s alleged conduct: “So @McKinsey built a ‘think tank’ based at McKinsey’s Beijing office, using McKinsey’s domain, McKinsey’s research, and their senior staff. That ‘think tank’ then authored a 300-page book on how the CCP could dominate future war technology and gave it to CCP Premier Li Keqiang.” 14

During questioning from U.S. Congress, McKinsey denied that it had done any work for the Chinese government. McKinsey reiterated this claim in a press release issued after the Financial Times article. McKinsey disputed the reporting on its alleged connection to UCI and “the central government of China is not, and to our knowledge has never been, a client of McKinsey.” 15 The Financial Times reported on apparent connections between McKinsey and UCI, and McKinsey has allegedly admitted that it “has [Chinese] local governments and state-owned enterprises among its clients.” 16

References

  1. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  2.  “Homepage.” Urban China Institute. Accessed from the Web Archive June 28, 2024. https://web.archive.org/web/20201101000000*/http://www.urbanchinainitiative.org/
  3. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  4. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  5. “Urban China Institute-UCI.” OnThinkTanks.org. Accessed June 13, 2024. https://onthinktanks.org/think-tank/%E5%9F%8E%E5%B8%82%E4%B8%AD%E5%9B%BD%E8%AE%A1%E5%88%92/.
  6. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  7. “McKinsey statement concerning recent Financial Times article.” McKinsey and Company. February 23, 2024. Accessed June 13, 2024. https://www.mckinsey.com/about-us/media/mckinsey-statement-concerning-recent-financial-times-article.
  8. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  9. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  10. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  11. “McKinsey statement concerning recent Financial Times article.” McKinsey and Company. February 23, 2024. Accessed June 13, 2024. https://www.mckinsey.com/about-us/media/mckinsey-statement-concerning-recent-financial-times-article.
  12. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
  13. “Senator Marco Rubio.” X. May 22, 2024. Accessed June 13, 2024. https://x.com/SenMarcoRubio/status/1793273105466675320.
  14. “Gabriel Noronha.” X. May 24, 2024. Accessed June 13, 2024. https://x.com/GLNoronha/status/1794022590077341910.
  15. “McKinsey statement concerning recent Financial Times article.” McKinsey and Company. February 23, 2024. Accessed June 13, 2024. https://www.mckinsey.com/about-us/media/mckinsey-statement-concerning-recent-financial-times-article.
  16. Foley, Stephen; Yu, Sun. “McKinsey-led think-tank advised China on policy that fed US tensions.” Financial Times. February 23, 2024. Accessed June 13, 2024/ https://www.ft.com/content/15a3e8d9-6c57-422a-8eb8-35a3c24a50e3.
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