China's attempts to target and influence key areas of the US are no surprise and the scale of industrial espionage shows that Beijing maintains major capabilities in this arena. These latest attempts to influence the fields of economics and monetary policy should be worrying for politicians and policymakers in the US.
The allegations of "espionage" come just as China and Japan, the world's largest holders of US debt, have dramatically reduced their holdings of US Treasury Bonds as the US faces sky-rocketing inflation and deteriorating economic conditions. Even the US public at large thinks that government policies are hurting its economy, so why wouldn't its foreign debt holders be concerned?
Whilst there are clear security issues with the Fed, the report by no means produces certainty. Rejected by both Chinese state media as well as the head of the Federal Reserve itself, we cannot simply take the report's conclusions as infallible.