Forget balloons: China is coming for your credit cards

OPINION:

For anyone who thought the threat from China was waning, the events of the last month have brought them back to reality that there is a real national security threat across the Pacific. Unfortunately, the threat extends beyond spy balloons and TikTok.

Since the Dodd-Frank financial reform law was passed in 2010, an under-the-radar company called UnionPay has been processing debit card transactions in the U.S. thanks to a provision in the bill referred to as “the Durbin Amendment.” UnionPay was created by China’s central bank in 2002 and is funded by the government. The 2010 law required banks to include alternative networks, including UnionPay, as options for merchants to process debit card transactions.

Now, despite the wave of spy balloons being shot down by the American military, the same people pushing the debit card policy want to do the same thing to the credit card market. Giant corporations including Amazon, Walmart, Home Depot. Target and Kroger have teamed up with some U.S. lawmakers to push legislation that would allow UnionPay to process your credit card transactions.

This is highly concerning. Lawmakers on both sides of the aisle have expressed concern that the social media app TikTok is collecting users’ personal data and information on China’s behalf. Yet the same lawmakers are not batting an eye at the thought of millions of credit card users’ personal financial information being sent to a Chinese government-owned payment processing firm under orders from the U.S. government.

UnionPay was founded when the State Council created a national payment system for mainland China. If TikTok, a supposed “private” company, is spying on Americans, is there any doubt that a state-owned entity is doing the same for the Chinese Communist Party’s benefit?

It shouldn’t come as a shock that the same multinational corporations pushing this law have a deep relationship with China and a vested interest in policies that benefit our strategic competitor. For example, Walmart has been in China for nearly 30 years and has operated hundreds of stores there. Amazon has a history of partnering with the Chinese government and censoring reviews and content to try to engender goodwill with Beijing.

Beyond business relationships, the retail industry has opposed policies in Washington that would provide our economy with a strategic advantage over China. The two largest retail trade associations, the National Retail Federation and the Retail Industry Leaders Association, were vocal critics of tough U.S. government sanctions on China.

In recent weeks, a third retail trade association, the Merchants Payments Coalition, has argued that the proposed legislation to extend the same policy that allowed UnionPay to process debit transactions to credit cards would actually strengthen national security.

Unfortunately for merchants, the only way to get to that conclusion is to blatantly misrepresent the policy that was actually proposed. In fact, the proposal, the Credit Card Competition Act, would direct the Federal Reserve to compile a public list of payment networks that are sponsored by a foreign entity or could pose a national security risk.

If there is one thing that we can all agree will not make Beijing second-guess its proactive actions and spy balloons, it is a public list generated by the Federal Reserve.

• Jianli Yang is the founder and president of Citizen Power Initiatives for China and the author of “For Us, the Living: A Journey to Shine the Light on Truth.”