China values ​​security and makes business difficult

Shanghai. Doing business in China is becoming more difficult, and potentially more dangerous, as the government prioritizes national security above all, despite insisting the country is open to trade.

In late March, authorities received leaders in Beijing to tell them they were not foreign guests but family members and assured them they would abolish bureaucracy.

But after China lifted anti-Covid restrictions in recent months, it restricted access to data from abroad and reported attacks on consulting firms.

Changes to the anti-espionage law that took effect July 1 will broaden the definition of espionage and prohibit the disclosure of national security information.

All of this has unsettled local and international companies trying to decipher the intentions of the authorities and understand what is prohibited.

Organizations strive to understand protocols and protect their employees. But the definition is very fuzzy, an official at an international accounting firm told AFP. No one knows whether you've crossed the line or not, or where the red line is, he adds.

US company Mintz Group realized it had crossed a line when police closed its Beijing office in March and arrested five local employees.

In April, US consulting giant Bain & Company said employees at its Shanghai headquarters had been interviewed.

In a 15-minute segment on state television last week, authorities said the multi-city raid on global think tank Capvision was part of a campaign to reform China's consulting industry.

The developments send a worrying signal and increase uncertainty for foreign companies doing business in China, the European Union Chamber of Commerce in Shanghai told AFP.

And at a time when companies are looking for clear signs that China's business environment is becoming more predictable and reliable, facts are not helping to restore confidence and attract foreign investment, he added.

Jeremy Daum, a legal expert at Yale University, points out that the key is that "China believes there are legitimate threats to its national security and will always prioritize them over other interests."

Given the increasing international tensions (...) the situation is unlikely to improve for the foreseeable future.

Many experts see widespread television coverage of the attack as a clear warning to Chinese of the risks associated with companies like Capvision, which is based in New York but is primarily a Chinese company.