China probes global consulting firm amid security crackdown
Investigation into Capvision comes after recent police raids on Bain & Company and Mintz Group.
Chinese authorities have launched an investigation into global consulting firm Capvision in the latest national security inquiry to highlight the risks faced by foreign companies in China.
The investigation comes after authorities discovered that foreign consultancies had been used by overseas institutions to obtain sensitive information, including state secrets, China’s state media CCTV said on Monday.
“Capvision accepted a large number of consulting projects from foreign companies in China-sensitive industries, and some of these companies had close ties to foreign governments, militaries and intelligence agencies,” CCTV said during a 15-minute television clip.
CCTV did not comment on whether Capvision had been sanctioned, but said the country’s national security authorities had treated the company “in accordance with regulations”.
A separate state media report said that Capvision’s offices in the eastern city of Suzhou had been raided by authorities and that the law enforcement operation also involved offices in Shanghai, Beijing and Shenzhen.
The investigation comes after Chinese law enforcement questioned staff at US-based consulting giant Bain & Company last month and raided the Beijing office of US due diligence firm Mintz Group in March and detained five employees.
Capvision, headquartered in New York and Shanghai, did not immediately respond to a request for comment, but said in a statement posted on WeChat that it would abide by China’s national security regulations and take the lead in ensuring industry compliance .
China has tightened its oversight of foreign companies in recent months, including through the adoption of a major expansion of its anti-espionage laws.
Earlier this month, the US Chamber of Commerce expressed concern about the tightening of surveillance of US companies in the country, warning that investors “would not feel welcome in an environment where risk cannot be properly assessed and legal uncertainty increases”.
The increased scrutiny comes despite efforts by Beijing to reassure investors that China is open for business after nearly three years of strict pandemic containment and repeated crackdowns on private industry.
Chinese Premier Li Qiang told a Chinese Communist Party meeting in March that entrepreneurs and private companies will have “a better environment and more space for development” in the coming years.