China is beginning to focus on the interests of the West in the country after five years of snowballing of the US leading trade and technology under Presidents Donald Trump and Joe Biden.
In the past two months, Chinese authorities have imposed new sanctions on US arms companies Lockheed Martin and Raytheon, launched an investigation into US chipmaker Micron, raided +US service provider Mintz and arrested local officials, arrested a CEO of the Japanese group Astellas Pharma and beat Deloitte in London with a good record.
President Xi Jinping’s administration is currently considering restricting the West’s access to critical infrastructure and technology for the global auto industry, according to a study by the Ministry of Commerce. The response to what Beijing describes as a US-led “technological blockade” reveals Xi’s plan to focus on industry and trade with little risk of undermining China’s interests.
Paul Haenle, a former China adviser to US President George W. Bush, said, “China has not abandoned its strategy of self-restraint to move to a new level of full retaliation, but they will use the operation to select companies to show their anger and Barack Obama.
However, the decision to carry out raids and arrest employees of foreign companies has made people aware that Beijing will step up its containment diplomacy if its relations with the West worsen. Mintz’s case with Astellas has led to an urgent review of employee safety and the suspension of some travel plans in China, two people from the foreign risk consultancy said.
“It’s a wake-up call for the industry,” one of the people said. “It’s hard for active players – the level of paranoia in China is high – but it also affects service companies and blue chip groups like Bain, McKinsey, and Boston Consulting Group.”
Experts say Japan is the most vulnerable to detention diplomacy in Beijing because it does not have its own sophisticated intelligence agency and lacks the resources to negotiate the return of its citizens.
Since China passed the anti-intelligence law in 2014, 17 Japanese citizens have been detained. According to Japan’s foreign ministry, five of them, including an Astellas employee, are still in custody.
In February, Beijing imposed new sanctions on Lockheed and Raytheon, two of the largest US defense companies. The move reflected Chinese opposition to arms sales to Taiwan but had little trade impact because the group was not allowed to sell arms to China. Beijing’s investigation into Micron, conducted last month in the country’s defense ministry, is seen as a clear sign of Xi’s growing retaliatory power.
Dexter Roberts, a fellow at the Atlantic Council, a Washington think tank, said he was surprised by Beijing’s arrest because the US-led campaign is to cut off China’s explosive technology from the ground up. “Fell in the heart of global China. high technology”. ambitious”.
Despite Beijing’s anger, Xi’s economic planners fear undermining efforts to use foreign investors to help rebuild China’s economy after the pandemic.
This means that Beijing should avoid taking action against companies and institutions that are considered important for economic recovery. “It all comes down to the fact that China is facing a lot of challenges this year, especially economically,” Roberts said.
“The last thing they need to do is have an even worse relationship with the distracted United States.” Following the Treasury Department’s $31 million audit of Deloitte for audit weaknesses, experts said they expect increased pressure on the Big Four accounting firms.
Cheng Lin, a professor of finance at the China Europe International Business School in Shanghai, said that despite the quality of research that has long been a problem with foreign companies in the region, “the main drivers” are Beijing’s data concerns with national security.
The auto industry is also preparing for the results of the Commerce Department’s 2022 technology export ban, including possible controls on some of the world’s rarest materials and lidar technology used in the mapping of driverless cars.
Tu Le, the founder of Sino Auto Insights, a Beijing-based think tank, said that any move China makes to “control its capacity in extraction and refining” is what the electric car industry is doing. The use will create “immediate concern for the United States, Europe.” Japan and Korea.” Government”.
These restrictions can be used as leverage to negotiate the relaxation of semiconductor controls, said Arthur Kroeber, head of research at Gavekal Dragonomics, a Beijing consultancy.
Soo Kim, a former CIA analyst, and expert on Asia expect Beijing’s retaliatory measures to expand because there appears to be no short-term solution to US-China relations. “With so many games in the US-China rivalry, Beijing has a lot of levers to lean on,”
