China’s new anti-espionage law places a significant burden on foreign businesses

According to Nikkei Asia, foreign corporations have found themselves in a precarious position since China’s new anti-espionage law went into force on Saturday.

According to Nikkei Asia, the heads of China’s two main business groups for foreign businesses warned that enforcing the legislation’s vague provisions would further damage business confidence already shattered by geopolitical tensions between Beijing and Washington.

In an interview with Nikkei Asia, Jens Eskelund, president of the European Union Chamber of Commerce in China, said, “What is it that we are supposed to comply with?”When does anything become a state secret? What exactly is it that we are not allowed to know?

As required by the original Anti-Espionage Law issued in 2014, the purpose of the amended law is to improve China’s national security.

The amendment permits law enforcement to search a suspect’s luggage, electronic devices, and other personal items in the event of an espionage investigation, broadening the spectrum of potential targets.

Since companies are already subject to rules like the Data Security Law and the National Security Law, this only raises the stakes for them.
“AmCham companies want to follow the laws,” Michael Hart, president of the American Chamber of Commerce in China, stated. People start to worry if what they consider to be routine business activity is reclassified.

The international law firm Morgan Lewis advised corporations in a research released in May, as reported by Nikkei Asia, that “the vague criteria for identifying individuals carrying out suspected espionage activities” may result in a larger degree of ambiguity.

As corporate activity and real estate sales declined in the first five months of the year, the Chinese government lowered interest rates in an effort to stimulate spending and hasten the economy’s recovery from the COVID pandemic.