‘Worried and fearful’: China’s move to amend state secrets law fuels concern among businesses
- Draft revision submitted to top legislature at a time of rising geopolitical tensions with US and its allies
- There have been calls for clarity as the move deepens fears about the risks of doing business in China
A draft revision of the Law on Guarding State Secrets was submitted for deliberation to the country’s top legislature, the Standing Committee of the National People’s Congress (NPC), which is holding a five-day session in Beijing until October 24.
Beijing believes the update is necessary and critical as an intelligence war with the US and its allies escalates. But the move will deepen the concerns of foreign investors and companies about the risks of doing business in China.
Jens Eskelund, president of the EU Chamber of Commerce in China, urged Beijing to provide greater clarity and help businesses understand “where China’s red lines are”, hinting that the deteriorating environment may drive away European companies.
“China’s increasing emphasis on national security considerations, coupled with a lack of clarity in related legislation, pose compliance challenges for companies,” he said. “As conducting business intelligence operations becomes a high-risk activity in China, the attractiveness of other markets that provide more legal certainty is enhanced.”
The amendment, which is almost certain to be passed by the NPC, will be the first major update to the law that was enacted in 1988 and revised in 2010. The law covers the definition, supervision and management of state secrets.