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Global Impact: China’s national security raids appear to undercut Beijing’s efforts to woo foreign investors
- Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world
- In this edition, we look at the recent raids on a host of consultancy firms in the name of national security and ask what it means for China’s economic outlook
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Wendy Wuin Beijing
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It used to be a highly rewarding sector for consultancy firms in China – serving foreign investors who were looking to tap the market potential of the world’s second-largest economy. But now, it has become hazardous.
China has tightened up its national security scrutiny in recent months by probing foreign consulting companies, testing the nerves of foreign investors who have long been concerned about policy uncertainties, an issue that has long undermined the attractiveness of the Chinese market.
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In the latest move, authorities raided international consulting firm Capvision. It was accused of helping to leak information about the Chinese military technology industry to foreigners.
Another global consultancy firm, Bain & Company, also said staff in its Shanghai office were questioned by police in April.
02:28
Beijing raids offices of consulting firm Capvision in widening crackdown over national security
Beijing raids offices of consulting firm Capvision in widening crackdown over national security
Earlier, corporate due diligence firm Mintz Group closed its China office in Beijing after five Chinese staff were detained by the police over “suspected illegal business operations”.
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