China’s counter-espionage Law amended on Saturday last week and Foreign Investment Law enacted on Jan. 1 last year were designed to work together.
Article 4, Paragraph 3 of the Counter-Espionage Law gives a broad definition of acts of espionage, ie: “Activities carried out, instigated or funded by foreign institutions, organizations and individuals other than espionage organizations and their representatives, or in which domestic institutions, organizations or individuals collude, to steal, pry into, purchase or illegally provide state secrets, intelligence and other documents, data, materials or items related to national security, or in which state employees are incited, enticed, coerced or bought over to turn traitor.”
This definition provides law enforcement officials with greater administrative discretion and “free evaluation of evidence” to define virtually anyone as a spy if they want to. Anyone can become a spy in the Chinese Communist Party’s (CCP) eyes at any time, even through perfectly innocent or innocuous activities such as conventional market research or travel photography.
This definition is similar to articles 34 and 35 of the Foreign Investment Law. Article 34 says: “The state shall establish a foreign investment information reporting system. Foreign investors or foreign-funded enterprises shall submit the investment information to competent departments for commerce through the enterprise registration system and the enterprise credit information publicity system.”
Article 35 adds: “The state shall establish a safety review system for foreign investment, under which the safety review shall be conducted for any foreign investment affecting or having the possibility to affect national security.”
Articles 34 and 35 provide the CCP with greater administrative discretion and room for interpretation to call anyone a “national security violator” if it wants. The lack of implementation regulations for the two articles would allow Beijing to force foreign investors to submit operational plans and business secrets to meet its requirements for security review.
The two acts share the characteristic of “Chinese rule of law” — articles without details about how they are to be implemented. This characteristic gives officials room for “power rent-seeking,” which is not only a breeding ground for corruption, but also a political leader’s tool to purge perceived enemies.
It is ordinary people and investors who will suffer in the end.
Taiwanese should take precautionary measures when coducting business or traveling in China to avoid unexpected jeopardy.
Yu Kung is a Taiwanese entrepreneur working in China.
Translated by Eddy Chang
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