Imagine if China's leaders allowed U.S. banks to operate in China. And imagine if the U.S. banks, in contrast to pursuing their normal goal of maximizing shareholder value, sought to help the U.S. government gain geopolitical advantage and help U.S. firms compete with Chinese competitors. What actions would the U.S. banks take?

As agents of U.S. interests, they would probably share information from Chinese clients with U.S. policymakers and U.S. firms. They would lend money to U.S. companies at lower interest rates than the ones being offered to Chinese firms. They might even foreclose faster on Chinese companies that competed with favored U.S. firms.

Sounds preposterous, of course. U.S. banks are in the business of making money, not working on the sly for Uncle Sam.

But now reverse the situation. What if the U.S. allowed Chinese banks to operate freely in the U.S.? What if those banks pursued their normal goal of helping China gain geopolitical advantage and Chinese firms compete globally. What actions would the Chinese banks take?

Likewise, they would probably share information from U.S. clients with Chinese policymakers and competitors. They would lend money to Chinese companies at lower rates than the ones being offered to U.S. firms. The banks would act as agents of the Chinese government. And they would have China's massive dollar reserves at their disposal, giving them the power to underprice U.S. banks, manipulate interest rates and handicap loan-seeking U.S. firms.

Unfortunately, this second scenario is not so preposterous.

In May, the U.S. Federal Reserve cleared Industrial and Commercial Bank of China, which has $2.5 trillion in assets and is 71%-owned by China, to buy 80% of the U.S. unit of the Bank of East Asia. It also cleared the 71% government-owned Bank of China and the 83% government-owned Agricultural Bank of China to open new branches in the U.S. In the process, it approved the China Banking Regulatory Commission's "comprehensive consolidated supervision" of the banks. The approval allowed a Chinese bank to buy a controlling stake in a U.S. bank for the first time.

Federal Reserve chairman Ben Bernanke and other Fed governors, in giving unanimous approval, have put the U.S. at risk. In a Rand Corporation study last year, analysts examined China's investments in the U.S. 78% of  the money China invested in the U.S. from 2007 to 2009 was in banking and financial services. Less than one quarter of its money was invested in other industries, mainly spread across refineries, semiconductors, telecommunications, laboratory testing equipment, and auto parts. What was China's purpose in spending on banks so heavily?

To quote Rand's analysts, "professional U.S. national security analysts" would argue that this "suggests a Chinese interest in acquiring information, contacts and connections that extend into the wide reaches of the U.S. economy and may reveal useful insights into its strengths and perhaps vulnerabilities."

Other national security analysts might ask: Will the Chinese state-owned banks aid in cyber-warfare during tough times? Will they finance the Chinese government's acquisition of U.S. firms with sensitive technologies or critical nodes in our information superhighway that might make America vulnerable to monitoring or shutdowns of critical banking, electrical or other systems? Will they help China acquire critical American raw materials for China's use only?

Bankers should appeal to Congress and the U.S. Treasury Department. As I argue in my just-published book "Strategic Capitalism," China's business goals diverge sharply from those of the U.S.  China-owned banks probably do intend to profit, but they also have a motivation to gain industrial intelligence and political influence. We cannot count on Chinese state-owned banks to comply with U.S. interests. Bank of Kunlun, controlled by state-owned China National Petroleum Corp., was sanctioned by the U.S. government in July for supplying Iranian banks with "hundreds of millions of dollars worth" of financial services.

Don't think China's banks won't favor Chinese interests. Look at a few clients cited in a report by the U.S.-China Economic and Security Review Commission:  Sinopec Corp., China Southern Airlines and China Telecom. In 2010, when China's prime lending rate was 5.36%, Sinopec enjoyed an average short-term interest rate of 2.7%. China Southern Airlines reported a maximum interest rate of 1.97%, and China Telecom received rates as low as 3.5%.

Perhaps the U.S. Treasury Committee on Foreign Investment in the U.S. should look closer at the Chinese bank approvals. The Treasury can stop these deals before Chinese banks are able to push their government agenda.

Following the Fed's May approvals, Rand analysts noted, "the ICBC precedent is likely to inspire many followers. Yet we have doubts about whether the U. S. has the appropriate framework to analyze them, and ultimately approve or reject them."

If China continues to enjoy the Fed's clearance, its banks will not only use just Chinese depositors' money to pursue its state agenda. They will use Americans' money.

We can imagine a better future. China blocks U.S. banks from operating in China. The U.S. should do the same to Chinese banks. The rule: Only Chinese banks free from Chinese government ownership and control get clearance to enter U.S. markets. We have nothing to gain in giving China and the Chinese Communist Party the keys to the U.S. banking system.

Richard A. D'Aveni is Bakala Professor of Strategy at the Tuck School of Business at Dartmouth College in Hanover, N.H. His fifth book "Strategic Capitalism" was published in July.