US warns new Chinese counter-espionage law puts companies at risk
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China’s embassy in Washington said Beijing had a right to safeguard national security through domestic legislation.
PHOTO: REUTERS
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WASHINGTON - The United States on Friday warned about a new Chinese counter-espionage law,
Chinese lawmakers passed a wide-ranging update in 2023 to Beijing’s anti-espionage legislation that went into effect on Saturday, banning the transfer of any information related to national security and broadening the definition of spying.
China has also cracked down on US consultancy and due diligence firms, a move business lobbies said unnerved foreign investors in the world’s second-largest economy.
The US National Counterintelligence and Security Centre (NCSC) said in a bulletin that China viewed outbound flow of data as a national security risk, and that the new and existing laws could compel companies’ local Chinese employees to assist in Chinese intelligence efforts.
“These laws provide the PRC (People’s Republic of China) government with expanded legal grounds for accessing and controlling data held by US firms in China,” the NCSC said.
“US companies and individuals in China could also face penalties for traditional business activities that Beijing deems acts of espionage or for actions that Beijing believes assist foreign sanctions against China,” it added.
It said the ambiguities of the law meant that “any documents, data, materials or items” could be deemed relevant to Chinese national security, also putting journalists, academics and researchers at risk.
China’s embassy in Washington said Beijing had a right to safeguard national security through domestic legislation. “China will continue to promote high-level opening-up and provide a more law-based and international business environment for companies from all countries, including the United States,” embassy spokesman Liu Pengyu said.
Chinese leader Xi Jinping has emphasised national security since taking office in 2012. Suspicion in China of the US and its allies has grown as the US-China rivalry intensified, yet Beijing has insisted it is opening up to overseas investment.
US officials told Reuters that since the enactment of the Chinese law in April, they have received a flood of questions from businesses and other groups about the risks of travelling to China.
The US State Department also updated its travel advisory for China on Friday, upgrading the “risk of wrongful detentions” among its warnings for Americans to reconsider travel to the country.
US Ambassador to China Nicholas Burns said Beijing’s targeting of US companies was politically motivated and that Washington would push back. REUTERS
