China's state security authorities have raided the offices of international advisory firm Capvision as part of a wider crackdown on the consulting industry. The move is part of Beijing's efforts to tighten control over what it considers sensitive information related to national security. Capvision is a so-called expert network that connects clients with people who provide specialist knowledge, largely in mainland China. The company's headquarters are in Shanghai and New York. It is the latest in a growing list of global consulting companies that have been ensnared in Beijing's crackdown.
Authorities raided Capvision's office in the eastern city of Suzhou, questioned its employees and searched office devices, according to a report on a Jiangsu provincial television station. The raid was part of a coordinated, nationwide operation that targeted the company's branches in Beijing, Shenzhen and Shanghai, where Capvision was founded in 2006. Police accused Capvision of posing a major risk to China's national security and of frequently contacting personnel with access to classified information in the Chinese Communist Party and the government, as well as in industries such as national defense and science.
Capvision responded on its official WeChat account on Monday, saying it would "firmly implement national security development" and "take a leading role in regulating the consultancy industry". The American Chamber of Commerce in Shanghai said it was concerned by recent reports about investigations of US due diligence and consulting companies in China. The recent raids have raised alarms in the international business community at a time when the Chinese government is trying to woo foreign investment to help revitalize a slowing economy after three years of self-imposed Covid isolation.
China has broadened the scope of its already sweeping counter-espionage law to expand the definition of espionage from covering state secrets and intelligence to any "documents, data, materials or items related to national security and interests". The consulting industry has fallen into the crosshairs, with the Jiangsu television report saying some companies in the fast-growing industry have ignored national security risks and failed to fulfill their responsibilities and obligations of counterespionage. State security authorities will strengthen law enforcement against illegal consulting activities that endanger national security based on the counter-espionage law, police told the TV station.
Capvision was singled out as a "leading company" in the industry in a separate report on Chinese state broadcaster CCTV on Monday. Started by former Bain consultants and Morgan Stanley investment bankers, Capvision offers consultations to over 2,000 clients and boasts a network of more than 450,000 experts, according to its website. The CCTV report said some consulting firms have "lured and deceived" experts in sensitive industries into providing internal secrets and eventually becoming "accomplices" for foreign forces to obtain state secrets and intelligence.