State governments across the United States have become a critical new battleground in Washington's strategic rivalry with China, with security experts and lawmakers cautioning that Beijing is systematically targeting local institutions, universities, critical infrastructure, and state legislatures — often below the radar of federal oversight. The warning came into sharp focus on 27 June during a hearing of the House Select Committee on the Chinese Communist Party.

Key Developments at the Congressional Hearing

Witnesses before the committee argued that Chinese influence operations have expanded well beyond federal agencies, exploiting gaps at the state and local levels. Michael Lucci, founder and chief executive of State Armor, told lawmakers that 'the American homeland is contested' and that state governments were increasingly confronting security threats that had traditionally been the preserve of federal bodies.

'States are on the front lines of this contest, and the Chinese Communist Party is exploiting vulnerabilities at the state and local level that can go overlooked here in Washington DC,' Lucci said.

What China Is Allegedly Targeting

Lucci cited several areas of concern, including land purchases near US Air Force bases and the placement of telecommunications equipment close to strategic sites — moves he described as efforts to position assets near sensitive military facilities. He also flagged American universities as a primary vector for Chinese influence and technology acquisition.

'From our view, the penetration of universities is a national security crisis,' Lucci said, alleging that some federally funded research programmes had developed partnerships with Chinese institutions linked to that country's military and defence industry.

How States Are Responding

According to Lucci, states including Texas and Nebraska have introduced measures to counter these threats. Texas has established a dedicated state cyber command to address cyber threats affecting local communities, while both Texas and Nebraska have adopted legislation targeting foreign influence and protecting research institutions. Additional measures reportedly include restrictions on foreign ownership near military installations and steps to address what Lucci described as transnational repression.

Pressure on State Lawmakers

Lucci further alleged that state legislators who backed such protective measures had themselves faced intimidation. He told the committee that some lawmakers had received economic threats or online harassment after proposing foreign agent registration laws. He characterised the effort as 'not normal advocacy' but 'a pressure campaign from a non-democratic actor acting within our democratic system.'

Committee Chairman John Moolenaar echoed those concerns, describing state legislatures, municipal governments, universities, and community organisations as 'soft targets' for influence operations, given that they typically operate with less oversight than federal institutions.

Broader Context and What Comes Next

This comes amid a sustained US effort to broaden its response to China beyond traditional military and diplomatic channels. In recent years, federal and state authorities have tightened scrutiny of foreign investments, land purchases near military facilities, and research partnerships involving sensitive technologies. The congressional hearing signals that pressure is now mounting for a more coordinated federal-state framework to close the vulnerabilities that local institutions present. How Washington translates these warnings into enforceable policy will be the defining question in the months ahead.