McKinsey and Co., the US multinational strategy and management consultancy, is reportedly questioning its presence in China as geopolitical tensions with the US continue to rise.
Some of the partners have been examining whether the company’s business in Asia’s biggest economy is worth continuing given the risks, people familiar with the matter told Bloomberg.
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Global managing partner Bob Sternfels disagrees with the sentiment and affirms McKinsey should insist on maintaining its global presence, despite it being the “more difficult choice to make”, he said in an internal memo.
Tensions between China and the US have been in the limelight.
While Trump’s planned 25% import tariffs on Canada and Mexico have, for now, been delayed for a month, a 10% levy on Chinese imports came into effect on Tuesday (4 January). China’s response has been relatively modest, with analysts saying that its actions suggest it is trying to prevent escalating the dispute into a trade war. Retaliatory measures are also meant to come into effect on 10 February, leaving time for a deal to be worked out.
The measures included adding US companies like PVH Group and Illumina to a blacklist. China’s Ministry of Commerce alleges they have breached market principles and taken damaging actions against Chinese businesses, although they did not specify what these were.
US Secretary of State Marco Rubio is known for being a communist hawk and has said the US should strengthen its efforts to rival China economically and militarily.
McKinsey has come under fire for its business dealings in China before. In February 2024, a group of Republican lawmakers said McKinsey should be banned from receiving federal contracts after it came to light that a think tank it founded, Urban China Initiative (UCI), had advised the Chinese Government on its 2016–20 Five-Year Plan.
Rubio, who at the time was the vice-chair of the Senate Intelligence Committee, and Michael McCaul, the chair of the House Foreign Affairs Committee, said the company had undermined US interests and security by doing business with the Chinese Government.
Sternfels responded that the he was unaware of the reports and said the UCI was a completely separate organisation to McKinsey.
A company statement said: “The UCI was a non-profit initiative co-founded in 2011 with Columbia University and Tsinghua University. The UCI is not McKinsey, and it did not perform work on McKinsey’s behalf. To our knowledge, McKinsey was not compensated for any UCI-related research or initiatives.”
They added that “the central government of China is not, and to our knowledge has never been, a client of McKinsey. Our client work in China is overwhelmingly for US, multinational and Chinese private sector entities.”
International companies have faced difficulties in China in the past few years. In April 2023, the offices of another US management company, Bain & Company, were raided by Chinese police. The month before, five employees from the US company Mintz Group were detained.
