Doing business in China just got a little riskier



Changes to espionage laws and a ban on leaving China increase the risk for visitors, including professionals, business executives and academics.

Chinese lawmakers voted a week ago to adopt a revised anti-espionage law that will take effect on July 1, 2023, Xinhua news agency reported.

The revised law was passed by the Standing Committee of the National People’s Congress (NPC).

The current anti-espionage law, adopted in November 2014, regulates and “protects” the fight against espionage, which plays an important role in safeguarding national security, said the National People’s Congress Standing Committee. Wang Aili of the Legislative Committee said.

The law, which previously covered state secrets, does not define what falls under Beijing’s national interests.

The revised law expands the definition of espionage to identify acts such as conducting cyberattacks against state agencies, classified agencies, or critical information infrastructure as espionage.

It will also expand the scope of its espionage activities to include all documents, data, materials and articles related to national security and interests in its protection, Wang said.

The amended law allows authorities conducting anti-espionage investigations to access data, electronic devices, and information on personal property and to bar border crossings.

This includes access to mobile phones and laptops.

This vague and pervasive extension to the law raises risks for foreigners in China, especially those who collect, create, use or process data – many providers of business services.

Typical business activities, such as collecting commercial information, may be restricted by law.

Epoch Times photo
Police officers try to stop a journalist taking pictures in the street outside a shopping mall complex in Beijing on Oct. 13, 2020. (Nicolas Asfouri/AFP via Getty Images)

Even before the new law came into force, foreign companies have been targeted by the Chinese Communist Party (CCP).

The Shanghai office of global management consulting firm Bain & Co was recently raided and staff questioned.

This follows similar lawsuits against two other global companies, Deloitte and Mintz. Five Chinese employees of the Mintz Group, a major law firm engaged in corporate analysis, due diligence and corruption investigations, have been arrested in Beijing.

In 2013, British corporate investigator Peter Humphrey and his American wife, who ran China Whys, a risk consulting firm, were arrested after working for pharmaceutical company GSK. They were eventually released after nearly two years of imprisonment.

After news of the lawsuit against Bain & Co., Humphrey said, “We know that other smaller Western consultancies that are not currently in the news are being harassed.

China also failed to renew foreign companies’ subscriptions to Wind, an information company that provides databases of company registrations, patents, procurement documents, and official statistics.

The Chinese Communist Party is expanding the legal environment for imposing exit bans, increasing its use of exit bans against everyone from human rights defenders to foreign journalists, according to a new report from Safeguard Defenders.

Extending Control Domestically and Internationally

Report “Trapped: Growing Use of China’s Exit Ban” deploy Provides official data and new legislation research.

A growing number of countries are resorting to exit bans to punish human rights defenders and their families, holding people hostage to force foreign targets to return to China, and controlling ethnic and religious groups. It includes interviews with victims about what they do, engage in hostage diplomacy, and threaten. foreign journalist.

China has also approved an amendment to allow an exit ban on persons (both Chinese and foreigners) under investigation deemed to be a potential national security risk.

Between 2018 and July of this year, at least five new or amended laws provide for the use of exit bans, with a total of at least 15 new laws created.

Australian Ambassador to China Graham Fletcher
Australian Ambassador to China Graham Fletcher (left) attempts to enter the trial of Chinese Australian journalist Cheng Lei at the Beijing No. 2 Intermediate People’s Court in Beijing, China, March 31, 2022, as court officials and police enter. Not allowed. (Kevin Freyer/Getty Images)

“Excluding millions of ethnic-based exit bans in the absence of transparent official data, At least tens of thousands of people have been banned from leaving China anytime,” the organization reports.

“Dozens of foreigners are also prevented from leaving China if they work for a company that is involved in a civil dispute. could be trapped in China.”

Irish businessman Richard O’Halloran has been banned from leaving China for more than three years (2019-2022) because the company he worked for was embroiled in a commercial dispute.

Another survey revealed that between 1995 and 2019, 128 foreigners were banned from leaving the country.

It’s Time to Gradually Increase Your Travel Risk Guide

In some cases, targeting foreigners is part of Beijing’s hostage diplomacy, retaliatory retaliation aimed at foreign governments, or tactics to extract concessions. In many cases, the actions are more serious, such as arbitrary detention, and sometimes exit bans are used in the early stages.

In December 2018, two Canadians, Michael Kovrig and Michael Spavor, were arrested in China in retaliation for the Canadian arrest of Huawei’s chief financial officer, Meng Wanzhou.

Epoch Times photo
Former diplomat Michael Kovrig hugs his wife Vina Najibullah as she arrives at Toronto Pearson International Airport on September 25, 2021. (DND-MDN Canada/Cpl. Justin Dreimanis)

Kovrig was a former Canadian diplomat and adviser to the International Crisis Group, and Spaber was a consultant on North Korea. They were indicted under Beijing’s vague State Secrets Law.

The two Michaels were released when Meng was released after agreeing to a deferred prosecution agreement related to bank and wire fraud charges in the United States.

The reality under the Chinese Communist Party is that lawyers, judges and courts are agents of the regime.

A directive issued by the Central Committee of the Communist Party of China in February called for law schools, lawyers, and judges to “oppose and oppose Western erroneous views such as ‘constitutional government,’ ‘separation of powers,’ and ‘independence policy. I was instructed to resist.

Two prominent human rights lawyers, Xu Zhiyong and Ding Jiaxi, were recently convicted of subversion and sentenced to more than 10 years in prison after a secret trial.

Trials in China are fair, with conviction rates not exceeding 99%.

In recent years, US State Department travel advisories on China have warned that Beijing is using the exit ban to “gain bargaining power with foreign governments.”

The Australian Department of Foreign Affairs is only advising travelers to China to “be very careful”.

Perhaps it’s time to update the advice to reflect the increased risks associated with visiting China.

Views expressed in this article are those of the author and do not necessarily reflect those of The Epoch Times.