China’s Revised Anti-Spy Law ‘Frightening Prospect’ for Foreign Firms There: Expert
China’s newly revised anti-espionage law will have a scary impact on foreign firms doing business there, according to former chief convergence officer for British Telecom and author Jon Pelson. On April 26, the Chinese communist regime passed the new version of its anti-espionage law, which will take effect on July 1. The revision has expanded the definition of espionage, making it broader and vaguer, which increased the range of information and resources that Beijing considers relevant to national security. For example, the scope of the subject of stealing secrets is expanded to “other documents, data, materials, and items related to national security and interests.” The newly revised anti-espionage law also classifies selling out to espionage organizations and their agents as espionage, as well as “conducting cyberattacks against state organs, secret-related units, or key information infrastructure.” Pelson, author of “Wireless Wars,” pointed to the new legislative move, noting that the term “national interest” has even broader implications than “national security.” “What is not national interest? Beating a local national champion at their own competitive game, I suppose, harms the national interest. And you could be accused of violating that,” Pelson told NTD’s “China in Focus.” “If you harm a company through legitimate business competition, and they’re considered important to the security of the country, you’ve now violated the national intelligence law, national security law,” he added. “That is a really frightening prospect for people that are businessmen and women and are there to make money and are not part of the intelligence community or the military. They’re not playing that game.” No recourse When it comes to the broader impact, if foreign firms are targeted over alleged violations of these laws, they will not get a fair shake as they could in free countries like the United States, according to the expert. “There’s no recourse in China … It’s completely at the whim, ultimately, of the Chinese Communist Party, so people know that you can be held, detained, without access to consular resources, which happens all the time,” he said. Pelson pointed to a March raid of the Beijing office of Mintz Group, a due diligence firm headquartered in New York. Five Mintz employees—all Chinese nationals—were reportedly detained on suspicion of engaging in illegal business operations, and the regime confirmed those charges. According to a Wall Street Journal report, a Mintz executive said the company had no idea who was detaining its employees, when they might be released, or why the raid was carried out. Due to the arrests, Mintz closed its sole office in China’s mainland. The company’s closure is a setback for China’s global business community, which depends on it for trusted international corporate investigations as part of hiring, transactions, and litigation in China. The incident came just days before the country welcomed Apple CEO Tim Cook, which the expert believed was not a coincidence. “That was a message they were sending. In my view, it was an arrogant message to say, ‘Here you are coming to our country. And while you’re here, look, what we’re gonna do, we’re gonna hamper your ability to carry out business in your fashion of open information and shared data, and so on, we’re gonna do it right in front of you, and what are you going to do about it?’” The escalating clampdown on foreign companies will further prompt their withdrawal from the country, in his opinion. “There’s a trend in that direction, certainly to lessen strategic reliance on China. And this is just speeding it up faster even than the motivated parties were going to, because now they’re saying we don’t, we literally can’t, even send people over there to help clean up operations, we’re just gonna start pulling things out. And I’m hearing that kind of talk already,” he said. “And they see friends that have their passports or their phones and laptops seized and are not allowed to leave the country, there’s going to be a great reluctance for any of the prime companies to send their people into China.” Alex Wu contributed to this report.
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China’s newly revised anti-espionage law will have a scary impact on foreign firms doing business there, according to former chief convergence officer for British Telecom and author Jon Pelson.
On April 26, the Chinese communist regime passed the new version of its anti-espionage law, which will take effect on July 1.
The revision has expanded the definition of espionage, making it broader and vaguer, which increased the range of information and resources that Beijing considers relevant to national security.
For example, the scope of the subject of stealing secrets is expanded to “other documents, data, materials, and items related to national security and interests.”
The newly revised anti-espionage law also classifies selling out to espionage organizations and their agents as espionage, as well as “conducting cyberattacks against state organs, secret-related units, or key information infrastructure.”
Pelson, author of “Wireless Wars,” pointed to the new legislative move, noting that the term “national interest” has even broader implications than “national security.”
“What is not national interest? Beating a local national champion at their own competitive game, I suppose, harms the national interest. And you could be accused of violating that,” Pelson told NTD’s “China in Focus.”
“If you harm a company through legitimate business competition, and they’re considered important to the security of the country, you’ve now violated the national intelligence law, national security law,” he added.
“That is a really frightening prospect for people that are businessmen and women and are there to make money and are not part of the intelligence community or the military. They’re not playing that game.”
No recourse
When it comes to the broader impact, if foreign firms are targeted over alleged violations of these laws, they will not get a fair shake as they could in free countries like the United States, according to the expert.
“There’s no recourse in China … It’s completely at the whim, ultimately, of the Chinese Communist Party, so people know that you can be held, detained, without access to consular resources, which happens all the time,” he said.
Pelson pointed to a March raid of the Beijing office of Mintz Group, a due diligence firm headquartered in New York. Five Mintz employees—all Chinese nationals—were reportedly detained on suspicion of engaging in illegal business operations, and the regime confirmed those charges.
According to a Wall Street Journal report, a Mintz executive said the company had no idea who was detaining its employees, when they might be released, or why the raid was carried out.
Due to the arrests, Mintz closed its sole office in China’s mainland. The company’s closure is a setback for China’s global business community, which depends on it for trusted international corporate investigations as part of hiring, transactions, and litigation in China.
The incident came just days before the country welcomed Apple CEO Tim Cook, which the expert believed was not a coincidence.
“That was a message they were sending. In my view, it was an arrogant message to say, ‘Here you are coming to our country. And while you’re here, look, what we’re gonna do, we’re gonna hamper your ability to carry out business in your fashion of open information and shared data, and so on, we’re gonna do it right in front of you, and what are you going to do about it?’”
The escalating clampdown on foreign companies will further prompt their withdrawal from the country, in his opinion.
“There’s a trend in that direction, certainly to lessen strategic reliance on China. And this is just speeding it up faster even than the motivated parties were going to, because now they’re saying we don’t, we literally can’t, even send people over there to help clean up operations, we’re just gonna start pulling things out. And I’m hearing that kind of talk already,” he said.
“And they see friends that have their passports or their phones and laptops seized and are not allowed to leave the country, there’s going to be a great reluctance for any of the prime companies to send their people into China.”
Alex Wu contributed to this report.
