In a move that has raised concerns among foreign companies, journalists, and academics, China has expanded its already sweeping counter-espionage law. The new changes broaden the definition of espionage from only covering state secrets and intelligence to encompass any “documents, data, materials, or items related to national security and interests,” without specifying specific parameters for how these terms are defined.
The new amendment, which comes into effect on July 1st, also categorizes cyberattacks targeting China’s key information infrastructure as espionage. This move is part of Chinese leader Xi Jinping’s increasing emphasis on national security and his attempt to crack down on perceived threats both within and outside China.
The original version of the law, passed in 2014, was already very powerful and ambiguous. However, the Chinese government does not believe that it is enough, and the expanded version of the law will create more legal risks and uncertainties for foreign companies, journalists, and academics.
The broadened counter-espionage law comes just months after China lifted its pandemic-era border restrictions, which had kept most foreign businesspeople and researchers away. As China is opening up, it is becoming more vulnerable in the eyes of Chinese leaders.
The new amendment is likely to heighten concerns of foreign individuals, such as academic researchers or journalists, and businesses about visiting or operating in China. The new language in the amendment suggests that any organization and anyone can be suspect, and anything can be counted as a threat to national security. This arbitrary application of the law will undoubtedly cause a chilling effect.
The lack of clarity around what kind of documents, data, or materials could be considered relevant to national security will pose significant legal risks to academics and businesses trying to gain a better understanding of China. Topics such as the origin of Covid, China’s real pandemic death toll, and authentic data on the Chinese economy could all fall within the crosshairs of the law.
China says that its laws related to national security and espionage are meant to safeguard the country. However, concerns about the application of the law have been compounded by a series of arrests of foreign nationals on espionage charges in recent years. Foreign governments have described the cases as being politically motivated and accused Beijing of violating due process by denying access to counsel and holding close-door trials.
The new amendment is likely to have a chilling effect on foreign businesses operating in China. Recently, Chinese authorities closed the Beijing office of Mintz Group, an American corporate due diligence firm, and detained five local staff. Chinese police have also questioned staff at the Shanghai office of US consultancy Bain & Company. The Chinese government continuously says it welcomes foreign investment. However, recent actions taken against US enterprises in China have sent the opposite message, leading to foreign businesses becoming more spooked.