Home News Why working in China is getting “very risky” for some U.S. companies

Why working in China is getting “very risky” for some U.S. companies

by News7

China cracks down on access to business data

Chinese authorities raided 3 firms gathering information on Chinese companies for investors


The risks of doing business in China are increasing for foreign companies. The offices of Capvision, a consulting firm with offices in New York and Shanghai, and two American firms have been raided in recent weeks as Chinese authorities exercise their power under a new security law.  

Police showed up out of the blue in early May at the Chinese offices of Capvision, searched the premises and questioned employees.

Navy releases video of U.S. destroyer’s close call with Chinese warshipEarlier this spring, U.S. firms Bain & Company and the Mintz Group also had their Chinese offices raided. Five of Mintz’s Chinese employees were detained.

All three companies did business gathering information on Chinese companies for U.S. investors.

An image from video aired on China’s state-run CCTV network shows authorities carrying out an investigation at the Shanghai office of international consulting firm Capvision Partners, May 9, 2023.


After the Capvision raid, Chinese state TV even aired a special report alleging, without presenting any hard evidence, that the company had lured Chinese citizens to spill state secrets.

Capvision kept its response to the raid low-key, saying on social media that it would “review its practices,” with direction from China’s security authorities.

But James Zimmerman, a business lawyer who works in Beijing, told CBS News the raids have spooked foreign businesses.

Navy releases video of close call between U.S. and China ships


“Everything’s a threat, you know,” Zimmerman said. “Unfortunately, in that kind of environment it’s very difficult to operate — when everything is viewed as a national security matter and… it looks as if…. anything you do could be considered to be spying.”

China calls U.S. concern over spying cargo cranes “paranoid”The billionaire boss of Twitter and Tesla, Elon Musk, was lionized when he visited China last week. He had a meeting with China’s top vice premier and got a rapturous welcome from employees at his Tesla facility in Shanghai.

He and other big players in China, including the bosses of American giants like Apple and Starbucks, may be untouchable, but smaller businesses are worried.

China moves to restrict U.S. access to rare earth minerals as trade war intensifies


“A lot of folks are starting to, you know, rewrite their strategic plans just because of the tension,” said Zimmerman, noting that the increasing crackdown by Chinese authorities “makes it politically very risky for them.”

Paradoxically, China recently launched a campaign to attract new business from overseas. But many investors have cold feet. A new counterespionage law is due to take effect on July 1, and they worry it may be used as a political weapon to punish certain firms by redefining legitimate due diligence as spying.

Small Business
Xi Jinping
Elon Musk

Elizabeth Palmer

Elizabeth Palmer has been a CBS News correspondent since August 2000. She has been based in London since late 2003, after having been based in Moscow (2000-03). Palmer reports primarily for the “CBS Evening News.”

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Source : CBS News

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