Foreign companies in China worried after national security raids

A string of national security raids on consulting firms, which have exposed the dangers of conducting business during the rule of Chinese President Xi Jinping, has left foreign companies in China worried. The American Chamber of Commerce’s president, Eric Zheng, expressed alarm over the claims that due diligence companies had been singled out by officials since their work is “essential to doing business in China.” “Chinese authorities should more clearly delineate the areas in which companies can or cannot conduct such due diligence,” Zheng said in a statement. “This would give foreign companies more confidence and enable them to comply with Chinese regulations,” he added. Zheng’s comments come after a warning of a similar nature issued by a US business organisation last month, who claimed that China’s recent enlargement of its espionage statute “dramatically increases uncertainties and risks of doing business in the People’s Republic.” Jorge Toledo Albinana, the EU’s ambassador to China, said on Tuesday that the legislation was “not good news” for those who wanted to see the Chinese economy open up even further. Beijing’s crackdowns, according to a statement from the EU Chamber of Commerce, “send a very mixed signal” as China works to regain corporate confidence after abruptly ending its stringent “zero COVID” approach in December. Chinese state media said on Monday that authorities were looking into consultancy company Capvision, which has offices in New York, Shanghai, Beijing, Suzhou, and Shenzhen, for offering to share sensitive information with foreign companies. On Monday, CCTV aired a lengthy news programme in which it claimed that unnamed Western nations had engaged in “rampant theft” of intelligence in vital fields relating to China’s military and economy and accused “overseas institutions” of doing the same by utilising consultant firms to gather private data. According to the report, a top researcher at a state-owned corporation was sentenced to six years in prison on espionage charges relating to their work for the consulting firm, and Capvision was accused of forcing local experts to divulge company or state secrets on behalf of unidentified customers. The investigation comes after Chinese law authorities questioned Bain & Company employees last month, as well as raided the Beijing office of the New York-based due diligence company Mintz Group in March and detained five employees. For clients like investment banks, hedge funds, and private corporations that may make investments or conduct business in China, Capvision, Bain, and Mintz, all of which have US bases, gather information and data on Chinese companies. In April, China expanded its anti-spying statute to cover all “documents, data, materials, and items related to national security and interests,” signalling a rising mistrust of international institutions in recent months. Even though the revised law won’t go into effect until July, it has already caused concern among international corporations, who claim that access to corporate registries that contain useful information about Chinese enterprises has been blocked. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.