Chinese authorities have launched an investigation into Capvision, a global consulting firm, due to concerns about the risks that foreign companies pose to national security in China.
According to Chinese state media CCTV, foreign consulting firms have been used by overseas institutions to obtain sensitive information, including state secrets. The media outlet stated that Capvision had accepted numerous consulting projects from overseas companies operating in industries sensitive to China, and some of these companies had close ties with foreign governments, military, and intelligence agencies.
CCTV did not provide any information on whether Capvision had been sanctioned, but it noted that national security authorities had dealt with the firm “in accordance with regulations.” A separate report in state media said that authorities had raided Capvision’s offices in Suzhou and conducted law enforcement operations in Beijing, Shanghai, and Shenzhen.
This investigation comes after Chinese law enforcement questioned staff from the United States-based consulting firm Bain & Company last month and raided the Beijing office of US due diligence company Mintz Group in March, detaining five staff.
Capvision, which has headquarters in New York and Shanghai, did not immediately respond to a request for comment. However, in a statement posted on WeChat, the company stated that it would adhere to China’s national security regulations and lead the way in ensuring industry compliance.
In recent months, China has tightened its scrutiny of foreign companies, including the passage of a sweeping expansion of its anti-espionage laws. This increased scrutiny has caused concern among US firms operating in China, with the US Chamber of Commerce expressing worries about the situation.
Despite this heightened scrutiny, Beijing has been keen to reassure investors that China remains open for business. In March, Chinese Premier Li Qiang told a gathering of the Chinese Communist Party that entrepreneurs and private businesses would enjoy a better environment and broader space for development in the coming years.
