Why China’s new spying law has foreign firms scratching their heads, scrambling like a ‘scared monkey’

Corporate insiders reflect on the ramifications and fallout from a series of raids on American consultancies operating in China

As Beijing keeps talking about opening its doors ‘wider and wider’ to lure investors, a ‘lack of clarity creates confusion and fear’

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Beijing says it is opening China’s doors “wider and wider”, but some foreign businesspeople are afraid of what awaits them on the other side. Illustration: Davies Christian

Published: 12:00am, 17 Jun 2023Updated: 1:21am, 17 Jun 2023

After three years of missing out on frequent trips to meet clients and colleagues in China, a senior partner in charge of the market for a New York-based consultancy firm was thrilled when the country reopened its borders in January.

Thanks to the rising tensions between Beijing and Washington, his agency’s business has been thriving – many companies caught in the geopolitical crossfire have been seeking services and advice from the firm.

And with coronavirus travel restrictions lifted, the consultant anticipated that his first post-pandemic trip to China would be in April or May.

But a series of national-security-related actions taken by Chinese law-enforcement authorities against consultancy firms gave him pause.

In March, authorities raided the office of American due diligence firm Mintz Group in Beijing and detained five staff members. In April, local police visited the Shanghai office of US consulting giant Bain & Company and questioned its staff. And in May, state media disclosed that authorities had raided multiple Chinese offices of international consultancy Capvision.

Looks like China is only trying to kill the chicken to scare the monkey … I am a scared monkey

China-market consultant, New York

Ultimately, the consultant cancelled his trip and arranged instead for his China team’s leader to come to the United States.

Declining to be identified because of the sensitivity of the matter, he said his firm has been very careful with compliance in China. However, as an American passport holder, he is still worried, given the state of affairs between the two countries.