The moves against consultancies and due diligence firms will make it harder for multinationals to operate in China, even as local governments are desperate to entice them in.
Police officers and security guards in Beijing, April 5, 2023. Credit: Andy Wong via AP Photos
Beijing’s sudden crackdown on consultancies and due diligence firms has not only sent a chill through those firms’ offices: It’s added to the confusion for multinational companies about their future in China.
The Chinese government effectively made its campaign against the alleged sharing of sensitive information official this week, when state broadcaster CCTV aired a prime time segment showing police raiding the offices of Capvision, a consultancy headquartered in New York and Shanghai. That followed recent news that security officials are investigating other companies, including American firms Mintz Group and Bain & Company.
For the foreign business community, the most puzzling question is: why now? Just seven weeks ago, China’s new premier, Li Qiang — who had gained a pro-business reputation in his previous roles — vowed to keep the country “unswervingly” open to international investors.
Companies that took such words as a cue to double down
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