China wants to attract more investors but fears for its national security

By Meryem Idrissi

Companies operating in China face an increasingly uncertain and risky environment as they must comply with “vague” national security regulations. The level of skepticism remains despite Beijing’s efforts to promote a post-Covid reopening.

In fact, from July 1, new amendments to the Anti-Espionage Act will come into effect. The definition of intelligence will be broadened, especially as the transfer of data related to national security is prohibited outside Chinese borders. As a result, Chinese and foreign companies present in China are expressing their concerns about this ambiguous situation, especially as the definitions are becoming increasingly imprecise. How to protect their employees? What limits should not be crossed? These are the questions foreign companies setting up in China are now asking.

Also, China considers there to be legitimate threats to its national security, which it prioritizes. Therefore, international tensions and, in particular, Sino-US relations continue to intensify, which will do nothing to improve the current situation, and hence Beijing’s concern to better control the flow of sensitive information and to press for tighter controls on industries that collect large amounts of information. Information.

In this sense, access to data in China through companies like Wind information in Shanghai or from the academic information site CNKIIt has recently become more difficult for foreign researchers.

According to Bloomberg, the Chinese government has asked public companies to phase out contracts with the Big Four accounting firms (Deloitte, KPMG, EY and PwC).

This means China faces a major dilemma: attracting foreign investors in an uncertain and ambiguous environment that is not promising for companies.