China risks rise "dramatically" after espionage law, Bain raid; US lawmakers stage war game to prepare for Taiwan invasion & US demands PRC stop harassing Philippine vessels -- China Boss News 5.01.23

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China risks rise "dramatically" after espionage law, Bain raid

In a statement last week, the US Chamber of Commerce said it is "closely monitoring the heightened official scrutiny of U.S. professional services and due diligence firms in China,” as “a matter of serious concern for the investor community.”

US Chamber of Commerce:

“In the context of China’s new Counter Espionage Law, which casts a wide net over the range of documents, data or materials considered relevant to national security, the additional scrutiny of firms providing essential business services dramatically increases the uncertainties and risks of doing business in the People's Republic. This is a matter of serious concern for the investor community and likely is as well for their local business partners in China.

The statement was published only days after the Financial Times reported that Chinese police had raided the Shanghai office of US consultancy firm Bain and the news that China's top legislative body had broadened a counter-espionage law that could make the conduct of ordinary business due diligence criminal.

Reuters:

All "documents, data, materials, and items related to national security and interests" are under the same protection as state secrets following the revisions, according to the full text of the revised law published by Xinhua late Wednesday.

The law does not define what falls under China's national security or interests.

The US Chamber of Commerce advocates for pro-business policies at the US federal government level, and shouldn’t be confused with the American Chamber of Commerce in the People’s Republic of China (AmCham China) who assists American companies in China.

That said, although AmCham China is, generally, upbeat in its statements regarding investment issues, even it seems to be struggling to find a silver lining in the worsening business environment. A report published by Reuters last month revealed AmCham‘s most recent survey results show most of its members "are more pessimistic about prospects.”

Reuters:

For the first time in the 25-year history of AmCham China's business sentiment survey, a majority of responding companies said China is no longer seen as a "top three investment priority".

Most said they were revising China investment plans to invest the same or less overall in the country, though the vast majority also reported no plans to relocate their operations out of China completely.

For the rest of the US Chamber of Commerce’s Statement on Concerns Over PRC Investment Climate, click here. For Reuters’ report, China approves wide-ranging expansion of counter-espionage law, click here. For Reuters’ March report, U.S. businesses in China are more pessimistic about prospects -survey, click here.

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