Taipei, Taiwan —

China’s Ministry of State Security this week issued a new warning about overseas spy agencies and their efforts in recent years to obtain state secrets under the guise of consulting agencies.

A six-minute video posted on the Ministry of Foreign Affairs’ official WeChat social media account on Thursday recreated a real-life case in which an overseas spy agency instructed a consulting firm to steal confidential information from a Chinese company seeking overseas investment.

The video comes as Chinese leader Xi Jinping met with U.S. chief executives this week to reassure them that the country remains open for business despite concerns about the country’s economy and worrying signals from its authoritarian government.

Foreign investment in China has declined over the past year as supply chains shifted to other countries, while Chinese authorities introduced new counterespionage laws and used exit bans to prevent business executives and others from leaving the country. It also conducted unannounced inspections of consulting and due diligence firms.

During the same period, the Ministry of National Security increased its efforts to use social media to raise alerts about foreign spies.

Its latest video, its fourth since launching its social media account last year, features dramatic music and fast-paced video elements and graphics that give it the feel of a spy thriller.

The play tells the story of a Chinese company executive who was pressed with a series of questions by representatives from a consulting firm, including the company’s total profits, the technical specifications of its products and how the Air Force uses its products.

In a WeChat post accompanying the video, the ministry warned of the national security risks posed by the advisory body.

“The seemingly normal investigations by the consulting companies are actually attempts to illegally obtain our trade secrets and suppress our advantageous industries,” the Commerce Department wrote, adding that the consulting companies were used by foreign spy agencies to penetrate China’s key areas. accomplice. .

Intimidation campaign targeting Chinese citizens

Some experts said the video was tailored for Chinese audiences rather than foreign investors because it was purely in Mandarin and told the story of the arrest of a Chinese citizen working for a foreign consulting firm.

Former U.S. national security official Dennis Wilder said the purpose of the video was to “inform and intimidate Chinese citizens, telling them that the government is spying on them.” He added that the campaign could have a chilling effect on Chinese citizens, especially those working for foreign companies.

Last year, Chinese authorities raided the offices of several U.S. companies in China and detained some Chinese employees. Affected companies include due diligence firm Mintz Group, business consulting firm Capvision and management consulting firm Bain & Company.

Chilling effect on new foreign businesses

While the campaign focuses on Chinese citizens, Wilder said Beijing’s efforts to safeguard national security will also have a chilling effect on foreign companies trying to enter the Chinese market.

He said that unlike large foreign companies with operations in China, such as Apple or Qualcomm, companies without operations in China need to conduct due diligence. “They have to understand what’s going on with their Chinese counterparts, but if they can’t do due diligence, they won’t invest in China,” he told VOA in a video interview.

A 2023 survey by foreign business groups showed that foreign companies are increasingly pulling investments and operations out of China. Survey data shows that only 45% of U.S. companies regard China as their main or top three investment destinations, while 66% of companies surveyed by the European Chamber of Commerce in China said they found it increasingly difficult to operate in China.

Although foreign companies lack confidence in the Chinese market, some analysts say that the Chinese government believes that maintaining national security and enhancing foreign investors’ confidence in the Chinese market are not inconsistent.

“Beijing believes that while trying to attract more foreign companies to invest in China, they should also ensure that key national interests such as core data or critical infrastructure are not easily obtained by foreign companies,” Hong Jinfu said. Political scientist at National Cheng Kung University in Taiwan.

He said Beijing’s approach would arouse deep suspicion among foreign companies. “At a time when the Chinese government has drawn many red lines in the name of national security, foreign companies investing in China will be treading on thin ice,” he told VOA by phone.

As foreign companies may still be hesitant to increase investment in China, Wilder believes that Chinese leaders may have different views on whether to prioritize attracting more foreign investment or whether to maintain national security.

“For Xi Jinping, I think if he has to choose between foreign investment, economic growth and what he sees as national security, he will always side with national security,” he told VOA.

But for other Communist Party leaders who must consider economic growth, such as Chinese Premier Li Qiang, Wilder believes their considerations will be different from Xi Jinping’s.