As tensions between the U.S. and China heat up, foreign executives and bankers are increasingly delaying or dodging traveling to China for work altogether.
Over the last year, Chinese government authorities have raided three foreign consulting and due diligence firms — including the U.S.-based Mint Group — and blocked foreign executives from leaving mainland China. Earlier this year, the U.S. government warned that China’s expansion of espionage laws could create legal risks for foreign companies, academics, researchers and journalists.
“There is a very significant cautionary attitude toward travel to China,” Tammy Krings, chief executive of ATG Travel Worldwide told The Wall Street Journal. “I would advise mission-critical travel only.”
Krings told the Journal she’s seen roughly 25% more cancellations or delays of business trips to China by U.S. companies over the past several weeks. Just over half of the companies surveyed by the American Chamber of Commerce in Shanghai said they were optimistic about their five-year business outlook — the lowest since the survey began in 1999, according to a study published last month.
One-third of the respondents said they considered China’s regulatory environment to be transparent. Another third of the respondents reported that politics and regulations toward foreign companies had become worse over the past year, according to the survey.
“The deteriorating business climate in China largely reflected Covid-related disruptions in 2022 and ongoing US-China bilateral tensions,” said Eric Zheng, the president of AmCham Shanghai.
Foreign executives leery of traveling to mainland China could dampen relations between Beijing and the U.S., which has been strained over last year. In August, the U.S. banned private equity and venture capital firms from investing in semiconductors, quantum computing and artificial intelligence in an escalation of a prolonged trade war. Before the U.S. enforced that regulation, China’s restrictions on exports of key minerals found in semiconductors went into effect.
Relations between U.S. President Joe Biden and Chinese President Xi Jinping has also been strained by tensions over Taiwan. Bridgewater Associates founder Ray Dalio earlier this week claimed that tensions are “right on the brink” of conflict. The now-retired executive has long been an admirer of Beijing’s economic policies and developed relationships with Chinese officials, according to Bloomberg.
“US-China relations are, in a number of areas, on the brink of red lines,” Dalio said on Tuesday. “So in another words, these are irreconcilable differences….”
Dale Buckner, the chief executive of U.S. private security firm Global Guardian, told the Journal that some of his clients have been detained or “soft interrogated” by Chinese officials. His clients — including workers at late firms, manufacturers and consulting companies — were usually in these situations for between two to five hours inside airports or hotels in the country.
Some U.S. companies have hired security consultants to determine whether there is anything that could put that at risk for detention by Chinese authorities, Buckner told the Journal. These consultants check for — among other things — military experience, dual nationalities or politically sensitive comments on social media, the Journal reported.
“You see this stuff in the movies. It feels very Hollywood-ish, but it is unnerving,” Buckner said.
Source: The Messenger
