Chairman of the Committee on the Chinese Communist Party Rep. Mike Gallagher, R-Wis., commented on China's updated counter-espionage law.
The update to the law, which takes effect July 1, bans the transfer of information related to national security and broadens the definition of spying, according to an April 27 CNBC news report. The updated counter-espionage law was expanded to include cyber attacks as spying. The law also bans any type of sharing of materials, such as documents, items and more, related to national security. Chinese authorities now have the ability to conduct anti-espionage investigations.
“The CCP’s updated counter-espionage law sends a loud, clear signal to the world: there is no such thing as a private company in China," Gallagher said in a statement. "The state reserves the right to arbitrarily seize any property, steal any IP, harvest any data. Our business leaders need to take off their golden blindfolds and recognize that the recent police raids of American companies Bain and Mintz are not one-offs, but part of a long, proud tradition of exploitation. The CCP is laughing at international business norms. Shame on us if we don’t listen."
This is the first update to the legislation since 2014, CNBC reported. The changes were passed by China's National People's Congress Standing Committee. Since taking office in 2012, President Xi Jinping has prioritized national security in China.
Two international firms, management consulting company Bain & Co. and corporate due diligence firm Mintz Group, have experienced police action in their Chinese offices recently, The Diplomat reported. In the case of Bain & Co., staff in their Shanghai office were questioned by police, while in the case of Mintz Group, their Beijing office was raided and five employees were detained. The reasons for the police actions are currently unknown.
The Chinese Communist Party recently implemented stricter legal limitations on the accessibility of information about companies and their employees, causing doubt for international firms like Bain & Co. and Mintz Group, according to The Diplomat. These companies specialize in assisting clients to identify fraudulent activity and other types of misconduct by potential business partners and other groups.
The new legal restrictions have made it more challenging for such firms to conduct their work effectively in China, The Diplomat reported.
