Some foreigners are throwing in the towel. On June 6th Sequoia Capital, a stalwart of Silicon Valley’s venture-capital industry, decided to part ways with its Chinese arm, which will become a separate firm. On June 10th thereported that Microsoft would move a few dozen top artificial-intelligence researchers from China to Vancouver, in part to avoid them being poached by Chinese big-tech rivals, but also for fear of harassment by Chinese authorities.
Even humdrum administrative and legal footwork required in most business dealings, from writing emails to exchanging bank-account information, is becoming fraught. Whereas historically foreign firms worried most about leakage of their intellectual property to Chinese rivals, now they fret about the flow of information from their Chinese partners to them, notes Diana Choyleva of Enodo, a research firm in London.
The plans’ scope and depth make them unlike the typical business-continuity plans that companies have drawn up in the past, says Benjamin Kostrzewa of Hogan Lovells, a law firm. They are based on a broad survey of fast-changing Chinese laws, such as those concerning data, intellectual property and national security, as well as of the equally protean American restrictions. Their provisions are informed by an evaluation, so far as one is possible, of any Chinese companies and individuals involved.