US businesses operating in China face new risks under updated PRC law, intelligence officials say

American businesses that are operating in China will face new risks under a revision to a counter-espionage law by the PRC, warns the National Counterintelligence and Security Center.

The center, which is part of the Office of the Director of National Intelligence, issued a memo on Friday outlining the new risks for American businesses operating in China under a recently passed revision to a counter-espionage law in the PRC.

According to the National Counterintelligence and Security Center, the law, which goes into effect on Saturday, expands “the definition of espionage from covering state secrets and intelligence to any documents, data, materials, or items related to national security interests, without defining terms.”

The law also “Broadens the scope of the PRC’s counterespionage law.”

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The American and Chinese flags

FILE – The American and Chinese flags wave at Genting Snow Park ahead of the 2022 Winter Olympics, Feb. 2, 2022, in Zhangjiakou, China. (AP Photo/Kiichiro Sato, File / Associated Press)

Intelligence officials are warning that any “documents, data, materials, or items” could now be “considered relevant to PRC national security due to ambiguities in the law.”

Additionally, the law also has the “Potential to create legal risks or uncertainty for foreign companies, journalists, academics, and researchers.”

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Chinese leader Xi Jinping and US President Biden meet in 2022

US President Joe Biden (R) and China’s President Xi Jinping (L) meet on the sidelines of the G20 Summit in Nusa Dual. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images) (Saul Loeb/AFP via Getty Images / Getty Images)

Mirriam-Grace MacIntyre, who leads the National Counterintelligence and Security Center, told the Wall Street Journal that the law expands the definition of espionage without defining terms in a manner that’s “deeply problematic for private sector companies.”

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Haines on the Hill

Avril Haines, director of national intelligence, during a Senate Intelligence Committee hearing in Washington, DC, US, on Wednesday, March 8, 2023. (Al Drago/Bloomberg via Getty Images / Getty Images)

The counter-espionage law which was recently revised is part of a group of more laws which could give the Chinese government “legal grounds for accessing and controlling data held by U.S. firms in China.”

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