The crackdown on foreign firms will deter global business—and undermine China’s own interests

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Bosses are scrambling to ensure that they do not fall foul of data-security laws

Officials have raided a number of foreign firms, invoking vaguely worded laws concerning data, intellectual property and national security. Since the spring they have searched the offices of Capvision and Bain, two consultancies; and they have detained employees from Mintz, an American due-diligence firm, and Astellas, a Japanese drugmaker.

China used to take a lax approach to intellectual-property rules, partly because its economy needed foreign know-how. Now that it has moreof its own to protect, it is more stringent. It has also become more guarded about data as it seeks to fend off Western sanctions. To be sure, worries about data security are not limited to China: American lawmakers are clamouring to ban, an app ultimately owned by a Chinese firm, which they fret might share data with the Communist Party.

 

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