ANALYSIS – The communist regime in China raided a private U.S. investigations company's office in Beijing on March 20.
This brazen and likely unlawful act against the New York-based due diligence firm, the Mintz Group, follows the FBI raid last fall of an illegal Chinese overseas ‘police station' in New York City. (RELATED: ‘Transnational Repression' – FBI ‘Very Concerned' By Illegal Chinese ‘Police Stations' In US And Abroad)
And some see it as a heavy-handed and non-symmetrical retaliation.
But the raid in Beijing is also likely tied to Chinese leader Xi Jinping's draconian security crackdown on information inside China.
“Red alerts should be going off in all boardrooms right now about risks in China,” said one source in the New York Post.
The same U.S. businessperson also said that the Mintz Group raid sent a “remarkable signal” that Beijing will suck up foreign money and technology but won't accept credible U.S. firms conducting research and investigations on Chinese partners or the country's business environment.
Reuters reported that the company confirmed that “Chinese authorities have detained the five staff in Mintz Group's Beijing office, all of them Chinese nationals, and have closed our operations there.”
The detained employees are reportedly being held somewhere outside Beijing. The company has not been able to contact the employees since they were detained.
Unlike the official police status of the Chinese outposts raided in NYC, the Mintz Group is a purely private company. (RELATED: As China's Power, And Risk Of War, Grows – US Plays Catch Up)
The firm describes itself as “a corporate investigations firm that gathers information before hiring, before transactions, during litigation disputes and after frauds, all over the world.”
According to its website, the company has over 450 investigators in 18 offices worldwide, but its Beijing office is the only one in mainland China. It has a second office in Hong Kong.
It also does background checks, asset tracing and fraud and corruption investigations for businesses planning acquisitions or other large investments.
This corporate mission will likely be used by Chinese authorities to accuse the company of being spies.
And it wouldn't be the first time Western due diligence companies have gotten into trouble with Chinese authorities.
British corporate investigator Peter Humphrey and his American wife Yu Yingzeng, who ran a risk advisory firm, ChinaWhys, were detained in 2013 for work they did for a giant British pharmaceutical firm.
They spent two years in jail.
But there is an added twist to this latest raid.
While there may not be a direct link, the New York Post reported that: “Randal Phillips, a partner at the firm [Mintz Group] who heads its Asia operations but is based outside of China, is listed on its website as the Central Intelligence Agency's former chief representative in China. Phillips worked in Beijing for years after leaving the CIA.”
Even though the raid can be seen as a response to the FBI raid against Beijing's illegal NYC police outpost, one of 100 stations around the world, the additional motive is also clear. (RELATED: FBI Finally Raids Communist China's Illegal Police Outpost In NYC)
As The New York Times reports:
…the move [also] highlighted the risks that firms involved in due diligence face in China as Xi Jinping, the country's top leader, has repeatedly called for a greater emphasis on security and has tightened the ruling Communist Party's grip on information.
The firm stated that it “has not received any official legal notice regarding a case against the company and has requested that the authorities release its employees.”
Perhaps not coincidentally, reported The Wall Street Journal, the Mintz Group raid is putting foreign companies in China on alert just as the country hosts an international economic conclave called the ‘China Development Forum' set for this weekend.
The high-profile event is expected to be attended by Apple CEO Tim Cook, Pfizer CEO Albert Bourla, Ray Dalio, who founded the world's biggest hedge fund, Bridgewater Associates, and other top executives.
According to a survey by the American Chamber of Commerce in China, with increasing tensions between the U.S. and China, U.S. businesses already operating in China are increasingly pessimistic about their prospects.
Maybe this latest Chinese act will make more U.S. firms think twice about investing there.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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The message here is clear. Companies need to get out of China and Russia.
The headline is a FALSE dichotomy. Cracking down as retaliation is real. The headline falsely implies a crackdown is legitimate.