China Raises Scrutiny on Companies With New Anti-Spying Rules

(Bloomberg) --

China’s top spy agency announced measures to fight infiltration by “hostile forces” in companies and other institutions, state media said, in the latest sign of businesses getting caught in the competition between Beijing and Washington.

The new rules allow Chinese security authorities to draw up lists of companies and organizations considered susceptible to foreign infiltration and require them to take security measures, the official Xinhua News Agency said Monday, citing a senior official with the Ministry of State Security.

“Overseas espionage and intelligence agencies and hostile forces have intensified infiltration into China, and broadened their tactics of stealing secrets in various ways and in more fields, which poses a serious threat to China’s national security and interests,” Xinhua said.

The rules were issued amid increasingly tense relationship between China and the West, as Washington seeks to counter Beijing’s increasing economic and security clout. The powerful Ministry of State Security has played a central role that struggle, most obviously with its high-profile detentions of foreign citizens such as Canadians Michael Kovrig and and Michael Spavor, who are awaiting verdicts after spying trials.

Chinese Foreign Ministry spokesman Wang Wenbin defended the regulations at a regular news briefing Tuesday in Beijing, saying security was “the cornerstone” of the nation. “We punish all those activities endangering national security and firmly uphold national security and our rights and interests,” Wang said.

State-owned enterprises have been increasing counterintelligence supervision on personnel traveling overseas since at least 2019, the Global Times newspaper reported separately Monday, citing an unidentified staff member in charge of foreign affairs at the headquarters of a central SOE in Beijing.

Five Eyes

“Staff going on business trips to foreign countries, such as countries of the Five Eyes alliance -- the U.S., U.K., Australia, Canada and New Zealand -- have been told to strictly report their travel destinations, agendas, and meetings with foreign personnel, and they must get approval from their direct superiors before the applications are reviewed by the headquarters,” the person was quoted as saying.

The enterprise has also strengthened predeparture anti-spying education through seminars and short movies, where cases of foreign intelligence work are shown, the state enterprise staff told the newspaper. The company has required staff “involved in sensitive fields or those holding important files” to leave their devices such as mobile phones, laptops and USB drives at home before going abroad.

“For visits to countries that have been categorized as high-risk in terms of spying activities, we will evaluate if the trips are necessary and would advise against going if they are not essential,” the staff member was quoted as saying.

The regulation didn’t specify which industries or companies will be on the list, but it said the list will be drawn up based on the level of confidentiality that the industry involves, the degree of foreign involvement, and whether there have been previous incidents that endangered national security, according to Global Times.

To carry out anti-espionage missions and eliminate the hidden dangers of foreign espionage, the regulation also gives national security organs access to buildings, internal materials, electronic kits, facilities, or computers and information systems of the companies involved, the report said.

China’s state security authorities will make further efforts to “organize and mobilize all social forces to jointly prevent and curb espionage activities and other acts hurting national security to strengthen national security shield,” Xinhua said.

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With assistance from Bloomberg