China has a new foreign relations law. Here's what it means for business
BEIJING — For foreign businesses in China, geopolitics hold more sway than new Chinese laws, according to analysts.
National security is a growing priority for the country. Two new laws, one on espionage and the other on foreign relations, took effect July 1. They contain catch-all phrases such as «state secrets» that are open to interpretation by local and central authorities.
Adding to the worries of those considering doing business in China is news earlier this year of three raids on international consulting firms with little public explanation.
In strictly legal terms, however, the legislative changes themselves don't increase the risk for foreign businesses in China, said Jeremy Daum, senior fellow at Yale Law School's Paul Tsai China Center.
Rather, he said, «the current international relations climate and competing political pressures may be making some businesses re-evaluate their cost-benefit analysis in accepting the risks of doing business in China.»
U.S.-China relations have deteriorated over the last several years, after decades of increased engagement.
High-level dialogue beyond the presidential level has only resumed partially this year with U.S. Secretary of State Antony Blinken's visit to Beijing, among others.
«The current environment lends itself to more occasions where a regulator or someone in the government in China may choose to take action that is non-transparent. That creates a risk for U.S. business,» said Michael House, partner at Perkins Coie and based out of offices in Beijing and Washington, D.C.
«And when there is no real opportunity for the two governments to talk about the reason for that action or at the government level try to get some better read on what's motivated those kinds of
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