On July 1, two new laws went into effect: one dealt with foreign relations, the other with espionage.
According to Jeremy Daum, senior fellow at Yale Law School’s Paul Tsai China Centre, the legislative amendments do not, strictly speaking, raise the risk for international companies operating in China.
The current climate makes it more likely that a regulator or member of the Chinese government will decide to take a non-transparent measure. That poses a risk to American enterprise, according to Perkins Coie partner Michael House.
The nation’s emphasis on national security is rising. On July 1, two new laws went into effect: one dealt with foreign relations, the other with espionage. They include general terms like “state secrets” that might be interpreted in many different ways by local and federal authorities.
The announcement earlier this year of three raids on foreign consulting businesses without much in the way of a public justification has added to the concerns of those considering doing business in China.
According to Jeremy Daum, senior scholar at Yale Law School’s Paul Tsai China Centre, the legislative changes themselves don’t, in strictly legal terms, make it riskier for foreign companies doing business in China.
Instead, he asserted that “the present state of international relations and competing political pressures may be forcing some businesses to reconsider their cost-benefit analysis in accepting the risks of doing business in China.”