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Caption: China raids a second consultancy as part of its anti-spy campaign

According to official media, China has begun to crack down on consulting firms operating there.

Outlets named one company, Capvision, and claimed that police had searched all of its offices in China.

It comes after a recent investigation into the China branch of US consulting firm Bain & Company and the March detention of Chinese employees of US company Mintz Group.

Beijing’s anti-espionage regulations regarding information exchange were expanded last month.

In 2008, ex-Bain consultants and bankers from Morgan Stanley founded Capvision.

According to its website, it has headquarters in Shanghai and New York and provides consultation services to more than 2000 clients.

Jiangsu Television, a state-run broadcaster in China, claimed in a report on Monday that the organization had not “seriously fulfilled its counterintelligence responsibilities and obligations to prevent espionage.”

Unnamed police officer claimed in an interview with the broadcaster that companies like Capvision frequently employ “highly-paid consulting experts” with connections to the Chinese government to “illegally obtain various types of sensitive data,” posing “significant risks to China’s national security.”

According to Jiangsu Television, state security agents searched Capvision’s offices in Suzhou, Shanghai, Beijing, Shenzhen, and other cities while questioning staff members and looking through office supplies. The exact date of the raids is unknown.

Capvision hasn’t addressed the accusations completely.

However, the company stated on Monday evening via its WeChat account that it will be “resolute” in carrying out its national security obligations. It declared that it will also play a “leading role” in regulating the consultancy sector.

Chinese police visited the Bain & Company offices in Shanghai just over a week ago and questioned employees. According to the Financial Times, which quoted persons briefed on the situation, officers removed computers and phones.

Additionally, the Mintz Group’s Beijing branch was closed in March when Chinese authorities detained five local employees.

The New York-based due diligence company was “suspected of illegal operations,” according to the Chinese foreign ministry. The Mintz Group specializes in internal investigations, fact-finding, and background checks.

Last month, China passed a comprehensive anti-espionage law that expanded the term of “spying” to encompass cyberattacks against important information infrastructure or state-run organizations.

The updated rule, which will go into effect on July 1st, also provides Chinese officials the power to physically examine someone’s possessions or demand their data.

Authorities may also impose entry and exit restrictions on foreigners and Chinese citizens who are accused of espionage.

Beijing’s anti-spy campaign, according to foreign officials and observers of China, may harm efforts to open up the country’s economy.

According to George Magnus, an economist at Oxford University’s China Centre, “foreign businesses and investors, many of whom are already wary of the operating and political environment will now consider more carefully the nature of their commercial commitments to China.”

He asserted that while China is criticizing the US and other countries for “decoupling,” it is also the movement’s main proponent.

Jorge Toledo Albinana, the ambassador of the European Union to China, stated on Tuesday that the most recent information regarding crackdowns on consulting was unfavorable.

According to the American Chamber of Commerce in Shanghai, it would be “helpful” if Chinese authorities could be more specific about the fields in which businesses are allowed to do due diligence or not.

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