US warns new Chinese counterespionage law puts companies at risk

The U.S. on Friday warned about a new Chinese counterespionage law, saying American and other foreign companies in the country could face penalties
from Chinese authorities for regular business activities.
Chinese lawmakers this year passed a wide-ranging update to Beijing’s anti-espionage legislation that goes into effect on July 1, banning the transfer of any information related to national security and broadening the definition of spying.
China this year has also cracked down on U.S. consultancy and due diligence firms, a move business lobbies have said unnerved foreign investors in the world’s second-largest economy.
The U.S. National Counterintelligence and Security Center (NCSC) said in a bulletin that China viewed outbound flow of data as a national security risk, and that the new and existing laws could compel companies’ locally employed Chinese nationals to assist in Chinese intelligence efforts.
“These laws provide the PRC (People’s Republic of China) government with expanded legal grounds for accessing and controlling data held by U.S. firms in China,” the NCSC said.