Since the revision of the Counterespionage Law of the People’s Republic of China (hereinafter referred to as the „Counterespionage Law“) in April 2023, some external forces have concocted a new story out of nothing, creating confusion around what is right and wrong and distorting the original intent of the law so as to hype the theory that China is overstretching the concept of national security, thus it is unsafe to invest and operate in China. Their intention is to slander China’s global image and undermine China’s economic stability, which is despicable and deeply sinister.
What are the facts? Let’s sort them out.
Those who vilify the law as destructive to China’s business environment are simply making up stories such as „China will make data collection on foreign enterprises and personnel mandatory,“ „normal access to business information may be treated as espionage activities,“ and „foreigners face increasing security risks in China.“
The truth of the matter is that the Countgerespionage Law is primarily targeting espionage activities that endanger China’s national security rather than normal business activities. The revised Counterespionage Law defines espionage activities clearly and unambiguously, with the purposes of guarding against, stopping, and punishing espionage, and does not target companies and persons that are legally operating, investing, or doing business in China.
The intelligence infiltration activities conducted by the United States (US) and other Western espionage and intelligence agencies against China are becoming more rampant. The Chinese national security authorities have recently disclosed some cases committed by the Central Intelligence Agency of the US, the Secret Intelligence Service of the United Kingdom (UK), and other overseas espionage and intelligence services using various means to conduct espionage activities in China. It is a common practice for countries worldwide to prevent and combat espionage and to safeguard national security through legislation. In the face of a grim counterespionage situation, it is entirely reasonable and just for China to amend its Counterespionage Law in light of changing circumstances. The alleged interference with legitimate business activities completely departs from the original intent of the law; such interference will never appear in the course of its enforcement.
From the beginning of its reform and opening up to the new era, China’s business environment has indeed witnessed significant changes.
More standardized. In recent years, China has promulgated and implemented the Foreign Investment Law, the Implementing Rule of the Foreign Investment Law, and the Regulation on Optimizing Business Environment, persistently cultivating a first-class business environment that is market-oriented, legalized, and internationalized. The revised Counterespionage Law has further clarified the boundaries between legal and illegal activities, increased the certainty of legal rules, and reduced the uncertainties related to law-breaking behaviors of enterprises and individuals, thus providing legal safeguards for normal business activities. Since the revised Counterespionage Law came into force in July 2023, no foreigners have ever been arbitrarily detained. Nor has there been a single case of administrative review or litigation against the law enforcement of China’s national security authorities.
Greater openness. In recent years, China has continuously improved its mechanisms for protecting the rights and interests of foreign investors, gradually reducing the negative list for foreign investment, expanding market access in various fields, comprehensively ensuring the national treatment of foreign-invested enterprises, and optimizing policies on the entry, stay, and residence of foreigners. China’s pace of opening up and its will to share opportunities and development dividends with other countries have never wavered or stopped, and will be pushed forward with greater vigor in the future.
More convenient. In recent years, China has promoted reforms of its administrative examination and approval system as well as business system in a coordinated manner, greatly simplifying processes and innovating services, such as „merging multiple certificates into one“ and „separating operating permits from business licenses.“ China has significantly shortened the time required for the approval of foreign-run start-ups. China has enhanced customs clearance efficiency and trade facilitation through such measures as „a single window,“ „smart customs,“ and „clearance integration.“ China has also made great efforts to clear up blockages that impede foreign investors‘ use of financial, medical, and Internet payment services, providing stronger protection for their investments and businesses.
Walls and barriers erected by the West, notably the US. Those who claim that „it is difficult to invest and operate in China“ should not forget the root causes of such a situation. For some time now, the US-led West have been „erecting walls and barriers“ and „decoupling and disrupting chains“ against China. For example, they have continuously imposed investment restrictions, strengthened export controls, and abused sanctions, thus greatly raising the uncertainty for investment in China and putting „shackles“ on normal economic and trade exchanges. Bloomberg commented that the Biden administration’s investment restrictions on China are „the companies‘ nightmare“ and „a boon for US intelligence agencies.“ Those initiatives to contain China are the culprits behind the decline of investment in China by certain countries.
Foreign enterprises’ structural re-adjustments. Those who complain that „profits in China are decreasing“ should not ignore the reality that China’s industrial competitiveness is accelerating. In 2023, China had the most science and technology clusters ranked among the world’s top 100, and had been the No. 1 filer of international patent applications for four consecutive years. There is an increasing supply of inexpensive Chinese products with good quality and excellent technology, which will lead to healthy competition among homogeneous enterprises at home and abroad, and the gravy train has ended in China.
Various data have also fully demonstrated that China’s business environment is improving and a growing number of multinational enterprises are „voting with their feet.“ In 2023, 53,766 new foreign-invested enterprises were set up nationwide, representing a year-on-year increase of 39.7%, of which actual investments from the UK, France, the Netherlands, Switzerland, and Australia increased by 81.0%, 84.1%, 31.5%, 21.4%, and 17.1%, respectively. The sixth China International Import Expo, the second Global Digital Trade Expo, and the first China International Supply Chain Expo were actively attended by many foreigners. Many well-known multinational enterprises also use these platforms for product debut, innovation, and long-term display.
Facts speak louder than words. The Counterespionage Law is precisely a law protecting and promoting legitimate business activities in China, and China will never accept any malicious attempt to defame this law or discredit its business environment.