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
Exclusive longform investigative journalism, Q&As, news and analysis, and data on Chinese business elites and corporations. We publish China scoops you won't find anywhere else.
A weekly curated reading list on China from David Barboza, Pulitzer Prize-winning former Shanghai correspondent for The New York Times.
A daily roundup of China finance, business and economics headlines.
We offer discounts for groups, institutions and students. Go to our Subscriptions page for details.
A long line of multinationals are now knocking on India's door. But if there's any chance of them successfully diversifying away from China's highly skilled workforce and well-oiled logistical machine, they'll need to learn from the industries that came before them.
The former Defense Secretary under George W. Bush and Barack Obama talks about Xi Jinping's relations with the PLA, Taiwan and how the U.S. should deal with China and Russia.
The Global Intelligence Platform used by The Wire China