Beijing’s new counter-espionage law: A red rag to foreign nationals in China

With China’s amended version of counter-espionage law coming into force on July 1, several European, American, Japanese, and South Korean companies are fearing they would not be able to operate comfortably in the world’s second largest economy, while several countries have issued travel advisory for their citizens visiting China. Beijing’s anti-espionage law bans transfer of any information related to national security while broadening the definition of spying. Under the definition of espionage, the law considers cyber-attacks against state organs or critical information infrastructure, as per Xinhua news agency, as major crime. The original version of the anti-spy law, adopted in 2014, defined espionage as covering “state secrets and intelligence.” The amended version views spying as accessing “any documents, data, materials and items related to national security and interests.” But it does not define what falls under national security or interests. As such, the said law allows Chinese authorities to carry out investigation anytime against any individual or entity and gain access to data, and information on mere suspicion from personal property such as smartphones and laptops. It means even academics and researchers are at risks of being in jail if Chinese authorities find their actions not falling under undefined national security interests. In particular, foreign journalists will find themselves restrained in reporting about China or in searching and storing statistics about the East Asian country. The Korean Times rather fears that Chinese authorities under the ambiguous clauses of counter-espionage law will get “plenty of excuses” to “wrongfully” target foreign nationals it dislikes. However, China’s Foreign Ministry Spokesperson Mao Ning defended the counterespionage law, stating “Every country has the right to safeguard national security through domestic legislation, which is universal practice. China is

advancing law-based governance on all fronts and will continue to uphold the rule of law, conduct law enforcement, and protect lawful rights and interests of individuals and organisations in accordance with the law.” China’s Foreign Ministry Spokesperson even allayed the fears of foreign journalists over their reporting activities in the country, saying, “There is no need to associate the counterespionage law with reporting activities of foreign journalists. China always welcomes media outlets and journalists of all countries to conduct interviews and run stories in China in accordance with laws and regulations and we will provide facilitation and assistance to them. As long as one abides by laws and regulations, there is no need to worry.” To whatever extent China may defend its new counter-espionage law, it will have a negative impact in foreign businesses in China, as well as people-to-people exchanges between the neighbouring countries and beyond, say analysts. The US National Counterintelligence and Security Centre (NCSC) on June 30 warned that American and other foreign companies in China could face problems in their operation. Reuters quoted NCSC officials as saying that the new Chinese law could compel American and foreign companies employing local Chinese nationals to assist in Chinese intelligence efforts. Earlier this year, China carried out raids against US consultancy and due diligence firms like Mintz Group and Bain & Company and detained their local staff for questioning. In May, a 78- year-old US citizen was sentenced to life in jail on spying charges. A senior employee of Japanese pharmaceutical company AstellasPharma was detained by China in March on suspicion of engaging in spying activities, “but it remains unknown how he allegedly violated the law,” The Japan Times said. Since November 2014, when original counter-espionage came into force, 17 Japanese nationals have been detained for their alleged involvement in spying activities. Five of them are still being held, according to the Japanese government. Given

this situation, experts fear fresh investments from America, Europe, Japan, or any foreign country in China will see a decline. Those already operating their businesses in Beijing, Shanghai or any other Chinese cities are undergoing tighter scrutiny in the East Asian country. The changes in counter-espionage law, “have raised legitimate concerns about conducting certain routine business activities, which now risk being considered espionage,” Craig Allen, president of the US-China Business Council was quoted by The Guardian, a British daily as writing in his blog. Allen further said, “Confidence in China’s market will suffer further if the law is applied frequently and without a clear, narrow and direct link to activities universally recognised as espionage.” A recent survey by the European Union Chamber of Commerce in China on business confidence showed 64% of respondents saying that doing business in the world’s second largest economy has become more difficult. Last week, the US State Department updated its advisory for China. “Reconsider travel to Mainland China due to the arbitrary enforcement of local laws, including in relation to exit bans, and the risk of wrongful detentions,” the US State Department wrote in its travel advisory on June 30 for Americans who are looking to make China a destination for their business, study, research, or tour purposes. On June 26, five-day before the counter-espionage law got implemented in China, the South Korean Embassy in Beijing, as per The Korean Times, issued warning to South Korean nationals that they should not search or download data related China’s national security such as maps, photos, or statistics on their mobile phones or laptops. The South Korean Embassy also warned South Korean nationals from taking photos of local protests or engaging in religious activities as they are prohibited by the Chinese government and as such, involvement in these activities could also be “mistaken” as espionage. Already, facing economic slowdown and local governments struggling to cope with $23 trillion of unmanageable debt, while
more than 20% unemployment among youth breaking all past records, China’s counter-espionage law is not seen favourably world over. It is feared that the Chinese economy will further suffer as foreign investments will witness a decline due to the atmosphere of fear generated by the new counter-espionage law among the business community.