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☆ China's tech feud with the US is heating up
▼ + stars: | 2023-05-21 | by ( Joe Mcdonald | Associated Press | ) www.businessinsider.com time to read: +4 min

China is clamping down on the use of computer chips from US tech giant Micron Technologies. China's government claims Micron products have unspecified "serious network security risks." It's the latest development in the United States' tech feud with China. They import more than $300 billion worth of foreign chips every year. Beijing is pouring billions of dollars into trying to accelerate chip development and reduce the need for foreign technology.

No one was present when Reuters visited the Hong Kong office of Mintz during business hours, with the doors locked and lights off. China's State Council Information Office, the Ministry of Foreign Affairs and the Hong Kong and Macau Affairs Office did not respond to Reuters requests for comment. The Hong Kong government said it did not comment on individual business decisions. Rights groups accuse Beijing of abuses against mainly Muslim Uyghurs in the western region of Xinjiang, including the mass use of forced labour. Reporting by James Pomfret in Hong Kong, Engen Than in Shanghai and Hong Kong Newsroom; Editing by Lincoln FeastOur Standards: The Thomson Reuters Trust Principles.

[1/3] The U.S. corporate due diligence firm Mintz Group's office is seen in Hong Kong, China, May 18, 2023. No one was present when Reuters visited the Hong Kong office of Mintz during business hours, with the doors locked and lights off. China's State Council Information Office, the Ministry of Foreign Affairs and the Hong Kong and Macau Affairs Office did not respond to Reuters requests for comment. The Hong Kong government said it did not comment on individual business decisions. Reporting by James Pomfret in Hong Kong, Engen Than in Shanghai and Hong Kong Newsroom; Editing by Lincoln FeastOur Standards: The Thomson Reuters Trust Principles.

☆ China's economy is growing again. So why are investors dumping stocks?
▼ + stars: | 2023-05-19 | by ( Laura He | ) edition.cnn.com time to read: +7 min

Investors trimmed their exposure to China amid economic uncertainty in the country, rising geopolitical tensions and Beijing’s crackdown on international consulting firms. The Nasdaq Golden Dragon China Index has lost more than 5% since April 18. Another concern for global investors is the country’s “fundamental investability,” he said, referring to geopolitical and Chinese policy risks. Ontario Teachers’ Pension Plan, one of the world’s largest pension funds, has closed its Hong Kong-based China equity investment team. “The more cracks appear in Western economies,” the more global investors will need to put money into Chinese assets, he added.

☆ China's security crackdown could signal new realities for foreign investors
▼ + stars: | 2023-05-16 | by ( Clement Tan | ) www.cnbc.com time to read: +6 min

Last Monday, state broadcaster CCTV singled out a consulting company for not complying with China's national security laws. "It may seem a paradox," said Chong Ja Ian, an associate professor at the National University of Singapore who studies Chinese foreign policy. So much of what is now regarded as national security or state secrets is not sufficiently defined or classified. This includes passing a data security law in 2021 on the protection of information involving national and economic security and on issues of important public interest. "To have multiple companies involved now in this crackdown and the restriction of financial data to foreigners, it appears that Chinese security departments are on to something larger."

These consultancies thrived by providing investors - from global hedge funds to private equity firms - access to industry experts and investigators who could obtain valuable corporate information. One private credit investor who used to join Capvision's calls with "industry experts" said clients did not want to pay top dollar for easily available public information. Many China-based consultancy firms also outsourced on the ground investigations to local contractors. Even before the latest raids on consultancy firms, some due-diligence firms were warned to stay away from Xinjiang related projects, sometimes by security authorities, according to industry sources. China denies abuses in Xinjiang, a major cotton producer that also supplies much of the world's materials for solar panels.

Capvision said in a statement soon after the broadcast that it would resolutely abide by national security rules. The CCTV report was the first clear indication of the national security scope of recent police action against several consulting firms. "The state security organ and other authorities will intensify law enforcement against activities that endanger national security, such as illegal consulting," the state-owned Global Times said. The revisions will see all documents, data, materials and items "related to national security and interests" given the same protection as state secrets. The law does not define China's national security or interests.

Hong Kong CNN —China’s state security authorities raided multiple offices of international advisory firm Capvision, state media reported Monday, part of a broader crackdown on the consulting industry as Beijing tightens control over what it considers sensitive information related to national security. The consultancy firm, which is headquartered in Shanghai and New York, adds to a growing list of global consulting companies that have been ensnared in Beijing’s widening crackdown on what it perceives as national security risks. In the report, Capvision was singled out as a “leading company” in the industry. According to state security police, he downloaded 5,000 documents from his state-owned company’s internal network. The authorities said he had provided clients with six pieces of information that were classified as state secrets, CCTV said.

☆ -China's steps to control its data and information
▼ + stars: | 2023-05-09 | by ( Josh Ye | ) www.reuters.com time to read: +3 min

Below is a timeline of main events in China’s effort to tighten its grip on data and information and especially over their export. July 2015: China passes a national security law that broadened the scope to protect its cyberspace and also emphasised a need to develop key technologies. June 2021: China passes a data security law on the protection of “important data” and “core data”, including information involving national and economic security, people’s welfare and on issues of important public interest. July 2022: China unveils cross-border data review measures that require a security review for “important” offshore data transfers. September 2022: Regulators ask China's biggest financial data provider Wind Information Co to stop providing offshore users with certain data, sources told Reuters.

☆ China Confirms Campaign Against Alleged Spying by Foreign Consulting Firms
▼ + stars: | 2023-05-08 | by ( Liyan Qi | ) www.wsj.com time to read: 1 min

Police have raided corporate offices as part of China’s efforts to shield the country from foreign influence. Photo: Cfoto/Zuma PressChina’s national security agencies have uncovered espionage by local units of foreign consulting companies, according to state media, in the first official confirmation that a nationwide sweep of corporate intelligence and due diligence firms is under way. Police recently raided offices of Capvision across China, alleging the New York-based provider of expert consultations and research paid employees of state-owned companies to leak secrets, China Central Television reported Monday. The rare and detailed disclosure of such investigations came after authorities raided U.S. due diligence firm Mintz Group ’s Beijing office and detained local staff in late March. Police also questioned employees at Bain & Co. ’s office in Shanghai last month.

☆ China Confirms Campaign Against Alleged Spying by Foreign Consulting Companies
▼ + stars: | 2023-05-08 | by ( Liyan Qi | ) www.wsj.com time to read: +1 min

China is scrutinizing and pressuring Western management consultants, auditors and others that multinational companies rely on. Photo: Cfoto/Zuma PressChina’s national security agencies have uncovered espionage by local units of foreign consulting companies, according to state media, in the first official confirmation that a nationwide sweep of corporate intelligence and due diligence firms is under way. Police recently raided offices of Capvision across China, alleging the New York-based provider of expert consultations and research paid employees of state-owned companies to leak secrets, China Central Television reported Monday. The rare and detailed disclosure of such investigations came after authorities raided U.S. due diligence firm Mintz Group ’s Beijing office and detained local staff in late March. Police also questioned employees at Bain & Co. ’s office in Shanghai last month.

☆ It's riskier than ever to be a foreign business in China, as evidenced by a series of recent sanctions, detentions, and an updated anti-espionage law that has watchdogs on edge
▼ + stars: | 2023-05-08 | by ( Huileng Tan | ) www.businessinsider.com time to read: +5 min

The updated law doesn't clearly define what constitutes China's national security or interests. The new law follows a recent spate of sanctions, probes, and detentions into foreign firms in China. Even now, the terms relating to national security and interest are still "not explicitly defined," the Eurasia Group wrote. The updated law is also particularly concerning because of the recent developments surrounding foreign firms in China. China's recent crackdown on foreign businesses is spurring concernsIn April, Chinese police questioned staff at American consultancy Bain in Shanghai.

☆ China Raids Offices of Another Global Firm in Espionage Crackdown
▼ + stars: | 2023-05-08 | by ( David Pierson | Daisuke Wakabayashi | ) www.nytimes.com time to read: +1 min

China has targeted another global business consulting firm on national security grounds, launching an investigation of the Shanghai-based Capvision Partners as part of a broader crackdown on the industry, state media reported on Monday night. Officers raided several of the firm’s offices in China, including in Shanghai, Beijing, Suzhou and Shenzhen, state media said, explaining that the company was not “earnestly fulfilling the responsibilities and obligations” of preventing espionage. The investigation is the latest in a recent government crackdown on consulting and advisory firms, whose clients include overseas investors and foreign companies seeking information into Chinese industry. Mintz Group, an American company that specializes in corporate investigations, said in March that Chinese authorities had raided its offices, detained five of its Chinese staff and closed the branch. Last month, Bain & Company, a U.S. consulting firm, said security officials had visited its offices and questioned employees.

☆ Beijing expects foreigners to trust, not verify
▼ + stars: | 2023-05-05 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

In recent months, Chinese investigators have detained employees of U.S. due-diligence firm Mintz Group, visited consultancy Bain & Company and suspended auditor Deloitte’s Beijing operations for three months. Security watchdogs have restricted overseas access to financial data providers like Wind Information, as well as academic database China National Knowledge Infrastructure. Local banks loaned 3.9 trillion yuan ($560 billion) in March alone while corporations issued 328 billion yuan of bonds. Besides Wind, other Chinese data providers including company databases Qichacha and TianYanCha have stopped opening to offshore users, according to three of the sources. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Foreign Firms in China Squeezed by U.S. Disclosure Demands, Beijing’s Security Clampdown
▼ + stars: | 2023-05-04 | by ( Elaine Yu | Dan Strumpf | ) www.wsj.com time to read: 1 min

Mintz Group’s Beijing office was raided by authorities, who detained five of the company’s workers. Photo: greg baker/Agence France-Presse/Getty ImagesHONG KONG—Foreign companies in China are walking a tightrope between their need for business intelligence to comply with proliferating U.S. sanctions and mounting concerns about the risks of carrying out the due diligence required for business on the ground. Authorities recently questioned staff at consulting firm Bain & Co.’s Shanghai office and detained the Beijing-based workers for U.S. due-diligence company Mintz Group. The news has put companies that conduct due diligence and business intelligence in China on heightened alert, with details about the visits scant and uncertainty swirling around what triggered them.

HONG KONG, May 4 (Reuters) - China's biggest financial data provider Wind Information Co told some customers late last year that it was restricting offshore users from accessing certain business and economic data as a result of the cybersecurity regulator's new data rules, two sources said. Restricted access to Wind by offshore users comes as China sharpens its focus on data usage and security amid rising geopolitical tensions and concerns about privacy in the world's second-largest economy. A Wind salesperson told the source in September the company had made the changes as per instructions from the Cyberspace Administration of China (CAC), which asked it to stop providing offshore users with certain data. The restrictions on offshore users' access to certain Wind data have expanded since last September, said the first source. Reuters has reported, citing sources that Chinese data providers including company databases Qichacha, partially owned by Wind, and TianYanCha have stopped opening to offshore users for at least months.

But a drumbeat of government security measures, including a broadening of counterespionage laws, and unannounced visits by investigators to the Chinese offices of several foreign firms have sent a shiver of worry that under Xi Jinping, economic pragmatism could again give way to a heightened focus on state control. International consulting and advisory firms are among those that have faced questioning from Chinese security officers in recent weeks, adding to fears among foreign investors that the authorities may be trying to choke off their access to unvarnished information about markets, competitors and potential deals in China. The scrutiny has left some companies questioning whether their China operations are at risk. Officers visited the Shanghai office of Bain & Company, a major American consulting firm, and questioned employees, Bain said in late April. And the Mintz Group, an American company specializing in corporate investigations, said in late March that officials visited its Beijing office and detained five Chinese employees.

"Since Xi Jinping took power in 2012, China has expanded the legal landscape for exit bans and increasingly used them, sometimes outside legal justification," the Safeguard Defenders report reads. Attention on the exit bans comes as China-U.S. tensions have risen over trade and security disputes. The Reuters analysis of records on exit bans, from China's Supreme Court database, shows an eight-fold increase in cases mentioning bans between 2016 and 2022. Most of the cases in the database referring to exit bans are civil, not criminal. Some activists say the wider use of exit bans reflects tighter security measures under President Xi.

Ambassador to China Nicholas Burns said on Tuesday Washington was very concerned about China's recent "punitive" action toward some U.S. companies, and that foreign firms are delaying investments in the country due to uncertainty about the openness of its economy. "If you put that together with some of the punitive actions that the government here in Beijing has taken against several American companies recently, we're very concerned about this," Burns said, adding: "We intend to have a full discussion with the government here about it." China's foreign ministry said at the time Mintz was suspected of engaging in unlawful business operations. Burns said a lot of foreign firms were delaying making major investments until they could see some consistency in messaging from China. He said he had warned American companies to carefully abide by a U.S. law that prohibits importing goods from China's Xinjiang region over concerns about forced labor by Uyghurs and other Muslim ethnic minorities.

☆ US Chamber of Commerce warns of major increase in risks for businesses in China
▼ + stars: | 2023-05-01 | by ( Michelle Toh | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —The United States Chamber of Commerce has warned that rising scrutiny of American firms in China “dramatically increases” the uncertainties and risks of doing business in the country. “The services these firms provide are fundamental to establishing investor confidence in any market, including China,” the chamber said in a statement, without naming either company. Suzanne Clark, president and chief executive officer of the US Chamber of Commerce, speaking during an event in Ottawa, Canada, in April. The news came a month after Chinese authorities closed the Beijing offices of Mintz, detaining five of its local staff. The news about Bain has spooked the US business community in China, the American Chamber of Commerce in China told CNN last week.

☆ Beijing’s Bain Raid, Espionage Law Are Self-Sabotage
▼ + stars: | 2023-04-28 | by ( Nathaniel Taplin | ) www.wsj.com time to read: 1 min

It’s Party time. Photo: Ng Han Guan/Associated PressChina’s economy is bouncing back quicker than expected. So, unfortunately, are the sort of heavy-handed policies that spooked investors during China’s last big expansion in 2021. On Wednesday China updated its counterespionage statute to cover all “documents, data, materials or items related to national security,” a considerably wider remit than the previous “state secrets and intelligence.” Recent weeks have also brought a raid of Bain & Co.’s Shanghai offices, the detention of Beijing staff at New York-based due diligence firm Mintz Group, and the arrest of a Japanese pharmaceuticals employee for alleged spying.

The revision is likely to heighten concerns of foreign individuals, such as academic researchers or journalists, and businesses about visiting or operating in China. “Something like a local government budget you could broadly define as relating to national security, or even food security,” he said. “Researchers definitely need to be careful.”China says its laws related to national security and espionage are meant to safeguard the country. “Even with this amendment we still don’t understand what kind of document constitutes a national security issue,” he added. Chinese authorities did not offer details about both cases, including the reason for the crackdown, but analysts say the move is likely to further spook foreign businesses operating in China.

☆ U.S. Consulting Firm Is the Latest Target of a Chinese Crackdown
▼ + stars: | 2023-04-27 | by ( Daisuke Wakabayashi | Keith Bradsher | ) www.nytimes.com time to read: +1 min

In the latest official scrutiny of a prominent American business in China, the authorities visited the Shanghai offices of the U.S. management consulting firm Bain & Company this month to question its employees. The questioning at Bain came less than a month after the authorities detained five Chinese nationals working in Beijing for the Mintz Group, an American consulting company with 18 offices around the world, and closed the branch. The five Chinese nationals were held overnight before their families were notified that they had been detained. China’s foreign ministry later said that the company was suspected of engaging in unlawful business operations. Mintz had no immediate response on Thursday to a request for comment on whether any of its five employees had been released.

☆ Chinese police query Bain's Shanghai office staff - company spokesperson
▼ + stars: | 2023-04-26 | by ( ) www.reuters.com time to read: +2 min

April 26 (Reuters) - Chinese police have visited U.S. management consultancy Bain & Company's office in Shanghai and questioned staff there, a company spokesperson said on Wednesday without elaborating. "We are cooperating as appropriate with the Chinese authorities," the spokesperson told Reuters by email. The U.S. embassy in China and the American Chamber of Commerce in Shanghai did not immediately respond to requests for comment. American companies worry that China may be stepping up retaliatory action because of measures taken against Chinese firms by U.S. President Joe Biden's administration. Chinese authorities last month raided the office of U.S. corporate due diligence firm Mintz Group in Beijing and detained five local staff.

☆ Billionaire Barry Diller says the media should 'absolutely' sue AI makers over ingesting text from articles
▼ + stars: | 2023-04-12 | by ( Sindhu Sundar | ) www.businessinsider.com time to read: +3 min

Barry Diller warned publishers to prepare to fight in order to get paid for AI's use of their work. Diller made the comments at the Semafor Media Summit in New York. "Companies can absolutely sue under copyright law," he said. "It's not clear right now to what extent that has copyright implications," Gerratana said. "It's possible we'll see court decisions that apply copyright law in ways that we wouldn't have expected, because this technology is new, the circumstances are new, and the facts are new."

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