Leaders in both Beijing and Washington talk a lot about improving relations. Yet all the while, they are imposing rules that stifle trade with and investment in the other. Beijing has two new laws – one entitled Anti-Espionage and the other Foreign Relations. Both will make it much more dangerous than preciously for foreign firms to invest in China or do business there.
Officials in both Washington and Beijing, as well as many lawyers involved, claim that these laws will have only a limited effect on business. Typical is the judgement of Jeremy Daum, senior fellow at Yale Law School’s Paul Tsai China Center. He declared that Beijing’s “legislative changes don’t increase the risk to foreign businesses in China.
Businesspeople will have a different interpretation. They know that no matter how tightly written a law is, it carries ambiguities that allow authorities room for interpretations. That room makes it risky for any business to even approach activities forbidden by the legislation. Michael House of Perkins Coie summarized such fears in this way: “The current environment lends itself to more occasions when a regulator or someone in government [. . .
What makes these laws especially dangerous to business is their respective claims to serve “national security.” Especially in China but also in the United States, national security lends itself to expansive interpretations. China’s new laws certainly seem broad. The Ant-Espionage Law would apply to anyone “seeking to align with an espionage organization” or obtaining “documents, data, materials, or items related to national security or interests.