Chinese Authorities Crack Down on Consulting Firms Suspected of Leaking State Secrets

According to the official website of Kaisheng Rongying, the company was established in 2008 to provide expert knowledge sharing services for financial institutions, consulting companies and multinational enterprises. Elites and strategic analysts.

Triumph Rongying subsequently stated that it failed to fully fulfill its national security prevention responsibilities in past business activities, and there were major hidden dangers and loopholes, which caused serious harm to national security. A compliance management committee has been established.

The investigation of Kaisheng Rongying is not an isolated case. Recently, consulting companies have frequently received attention and investigation from Chinese officials. At the end of April, the American consulting firm Bain said that the Chinese police had visited its Shanghai office to question some employees. In March, American company Maxim said China had raided its Beijing office and detained all five of its Chinese employees.

Bain is a global consulting company. Its offices in China provide consulting services for large multinational companies in China and well-known domestic corporate clients, involving high-tech, finance, chemical and other industries. Maxwise is a corporate investigation company that provides clients with investigation services before transactions or during litigation.

Chinese Foreign Ministry spokesman Mao Ning said the company was suspected of illegal business operations and the case was being further investigated.

Chinese lawyer Teng Biao pointed out to the BBC that military industry and national defense are sensitive industries, but not all information in sensitive industries is a state secret, and a large amount of information is not a state secret; even if it is sensitive information and state secrets, investigation companies and consulting companies have not kept it secret obligation.

In his view, only the experts who are consulted have a duty of confidentiality. If the person investigated by the consulting company has a secret document that is written as a state top secret, and they know it is a state secret document but leak it to more people, this will involve the disclosure of state secrets.

“However, if the consulting firm obtains certain information but does not know that it is a state secret, this situation is a normal commercial investigation, and the charge of leaking state secrets cannot be abused.” He said.

Chen Cheng, a professor of political science at the State University of New York at Albany, pointed out that in recent years, as the relationship between China and the West, especially the United States, has become increasingly tense, China has paid more and more attention to “security”, which of course includes commercial security.

“In the past few years, countless Chinese companies have been sanctioned by the United States for various reasons. It can be seen that the United States has a considerable understanding of the situation of Chinese companies, and even some seemingly unknown companies. The Chinese government is obviously unwilling to let this situation continue. , Now investigating and processing some consulting companies that have collected a large amount of data from Chinese companies is an obvious signal.” She told the BBC.

Xia Ming, a professor of political science at the City University of New York, pointed out that the current turmoil is inseparable from two factors: “It is difficult to clarify the relationship between the party-state and state-owned enterprises, private enterprises, and scientific research institutions in China. What is general knowledge and information? What is state secrets? There are often no clear boundaries, and law enforcement and crimes are arbitrary. Second, the relationship between China and the outside world is in a state of tension. closely connected organizations and businesses.”

Xia Ming also pointed out that the governments and companies of all countries will guard commercial and state secrets very closely, and there is nothing wrong with keeping secrets as a professional ethics, but the concept of keeping secrets in China is casual, broad and vague.

Chen Cheng believes that China’s measures will not help repair the relationship between China and the West. It will only intensify the impression that China is “opaque” in the West, and some Western companies and institutions will have more concerns about their future operations in China.

She pointed to the recent revision of China’s Anti-Espionage Law as part of a broader trend to strengthen security.

At the end of April this year, the Standing Committee of the National People’s Congress of the People’s Republic of China passed the revised Anti-espionage Law, which will come into effect on July 1 this year.

“This in itself will not prevent foreign companies from continuing to invest in China, but foreign companies will inevitably become more cautious in their future investments and their awareness of risk aversion will further increase. Generally speaking, this is a warning sign for foreign investment,” she said.

Xia Ming believes that the biggest risk that Western companies face in China is that there is no rule of law, or the legal system is not perfect and opaque. The rise of consulting companies is to solve information obstruction and improve the business environment for foreign capital.

“Any fanfare and campaign-style investigation, investigation and arrest of relevant consulting companies and their members will increase the tension and panic of the outside world, including investors, foreign companies, tourists, overseas students, etc.,” Xia Ming said. It is becoming more and more difficult for China to attract foreign investment and attract businessmen, students, and tourists.

Xia Ming also pointed out that Western countries headed by the United States are discussing whether to decouple from China, and the current consensus is basically “no decoupling but taking risks”.

“If China arbitrarily and unilaterally increases policy uncertainty and investment, travel and stay risks, then ‘de-risking’ will inevitably not equal ‘decoupling’.” Xia Ming said.