China’s New Foreign Relations, Anti-Espionage Laws ‘Great Concern’ For EU Businesses, Says Trade Commissioner

EU's trade commissioner, Valdis Dombrovskis, pointed out that the ‘ambiguity’ in the laws leaves a lot of room for interpretation, thus making it difficult for European businesses. 

Dombrovskis noted that European companies are struggling to understand their compliance obligations and this will significantly impact their business confidence in China.

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European businesses in China voiced concerns about the recent security laws introduced by the country, the European Union’s trade commissioner said in Beijing on Monday. The businesses expressed their doubts about the new foreign relations law and the updated anti-espionage law revealed by China, the trade commissioner, Valdis Dombrovskis, informed while speaking at the Tsinghua University in the city. 

According to an AFP report cited by the American news agency Barron’s, Dombrovskis said, “The new Foreign Relations Law and updated Anti-espionage Law are of great concern to our business community,”. The EU official pointed out that the ‘ambiguity’ in the laws leaves a lot of room for interpretation, thus making it difficult for European businesses. 

“European companies are concerned with China's direction of travel. Many are questioning their position in this country,” he added. Explaining the problems being faced by EU firms in China, he said, “This means European companies struggle to understand their compliance obligations: a factor that significantly decreases business confidence and deters new investments in China.”

Notably, both the new laws came into effect on July 1, earlier this year. According to a report by CNBC, one of the major concerns of these laws was the ambiguous language used, such as catchphrases like ‘state secrets’ used in the laws, which are open to interpretation by authorities. 

The new espionage law specifically expands the scope of ‘acts of espionage’ to include ‘seeking to align with an espionage organisation’ and any efforts to illegally gain data related to national security, the report added. 

The foreign relations law further stated that foreign organisations in China ‘must not endanger China’s national security, harm the societal public interest, or undermind societal public order’, the report noted. 

The lack of clarity in these laws adds to the worry for foreign businesses in China. Further, these laws were introduced after multiple reports of Chinese authorities investigating and raiding foreign firms came to the surface from March to May. 

Jens Eskelund, president of the EU Chamber of Commerce in China, explained earlier in June that the new laws have become a concern for the EU business community in China as ‘everything from food to energy is given a security angle’ in the country. “That I think creates uncertainty about what are the exact borders between what falls under a security purview and something we can operate as normal businesses,” she remarked.