Receive free Chinese business & finance updates
We’ll send you a myFT Daily Digest email rounding up the latest Chinese business & finance news every morning.
Chinese authorities have approved the “rectification” of China-focused consultancy Capvision, the company has said in a statement, just months after Beijing launched a crackdown on the operations of foreign consultancies and due diligence groups.
State media in May reported that security agents had raided multiple offices of the international consultancy, which connects corporate clients to its network of experts in the world’s second-biggest economy.
With the primetime broadcast of a phalanx of officers invading its office in Shanghai, Capvision became emblematic of Beijing’s concerns that international business consultants posed a national security threat, in part by allegedly providing sensitive information to clients.
Beijing also probed Bain & Company, the international consultancy, and due diligence group Mintz, rocking the foreign business community in China.
Capvision, in a statement released on Tuesday, said that under government guidance the company had overhauled its compliance system and that the changes had been accepted by the authorities.
In language echoing Beijing’s official diktats, Capvision vowed to “take the lead” in acknowledging the importance of national security in the consulting industry while also making a small contribution to “Chinese-style modernisation”.
Capvision’s statement comes as Xi Jinping’s administration, which is facing one of its bleakest growth outlooks in decades, tries to encourage foreign investment in China despite intense rivalry with the US. Last week, the Cyberspace Administration of China unveiled rules to water down some of its tough cross-border data controls amid complaints from foreign businesses.
The raids on consultancies have made operating in China more difficult for foreign companies, given their dependence on consultants to navigate the complex local regulatory environment and competitive business landscape.
Foreign investors and business people are also increasingly uneasy over their personal security when operating in China.
Last month, the Financial Times reported that a senior Nomura banker was banned from leaving mainland China, while the US state department warned “over the risks of arbitrary enforcement of local laws, including in relation to exit bans, and the risk of wrongful detentions”.
Such fears have also deepened following the expansion of China’s anti-espionage law in April, as well as the encouragement by Chinese security agencies of a “whole of society” approach to policing security risks.
“Our company sincerely accepts supervision from all walks of life,” Capvision said in its statement.
Leave a Reply