Foreign expert networks in Beijing's crosshairs, PRC expels Canadian consul after own diplomat sent packing & Italy expected to leave BRI -- China Boss News 5.15.23
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Foreign expert networks in Beijing's crosshairs
Financial Times last week reported that a Chinese state media TV program that aired "primetime" and showed real police video taken of law enforcement “invading an office in Shanghai” was a "clear message" that Beijing no longer tolerates information sharing with foreigners. The firm filmed while under investigation was Capvision, a multinational foreign expert network that conducts due diligence, FT said.
FT:
Billed by state media as part of a nationally co-ordinated campaign to clean up the consulting industry in the world’s second-largest economy, it follows other raids in recent weeks on blue-chip US firm Bain & Company and due diligence group Mintz.
The campaign is making it more difficult than ever for foreign investors to glean even basic information on potential acquisitions, Chinese partners or suppliers. That is at least partly by design as Beijing also methodically curtails foreign access to once openly accessible public data such as academic theses and business ownership records.
In an update, South China Morning reporters said that US consultancy firm Bain & Company is now “offering some staff in China the option to take six months’ leave" after police raided its Shanghai offices, seizing employees phones and computers. Although China has not disclosed the reason behind its national security crackdown on Bain, CCTV - the state news broadcaster who aired the TV program - “accused” Capvision “of degenerating into an accomplice of overseas intelligence agencies,” after it conducted “informational interviews with subject experts for clients,” news staff said.
Bob Guterma, a former Capvision compliance officer for the China office, told FT that “the revelations were surprising given the group’s long experience of dealing with the laws and pitfalls associated with its business.”
FT:
“Capvision has been doing what they’re doing for a very long time and not secretly — they knew that their business model flies real close to the no-fly zones,” said Guterma, who now leads independent news outlet The China Project.
For this reason, he argued, the CCTV report was more about sending a warning to the public about providing information to foreigners. Normally, wrongdoing would be dealt with administratively by the authorities and not splashed over state television.
“With the CCTV special, that’s the full treatment . . . this is intended to send a big message.
Ker Gibbs, former president of the American Chamber of Commerce in Shanghai, noted that the recent raids were “sending chills to the whole [foreign business] community.”
“The lawyers and the due diligence people are like swamp guides,” and “[i]f you don’t have a swamp guide you are not going into the swamp,” he said.
For the rest of SCMP’s report, Exclusive: Bain offers China staff voluntary leave amid national security crackdown, click here. For Financial Times’ report, ‘The full treatment’: China sends a message with raid on consultancy, click here.
Law and International Xi
China expels Canadian consul in retaliation for expulsion of diplomat in Toronto
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