Should you be frightened by China’s revision to the anti-espionage law?

China is widening its crackdown on national security threats, as the flow of people, foreign companies, and data come under greater scrutiny from Beijing.

China’s Standing Committee of the National People’s Congress (NPC) updated the country’s anti-espionage law on April 26 “to expand the scope of targets of espionage, with all documents, data, materials, and articles” related to national security. The law does not define what falls under national security or interests. (The full text can be found in Chinese here, and an English translation here.)

Cyber attacks that target China’s “state organs, confidential organs or crucial information infrastructure” can also count as an act of espionage under the new version of the law.

The legal revisions, which go into effect on July 1, have heightened concern over the risks to individuals and organizations operating in China, particularly those in sensitive industries such as journalism, technology, research, and data monitoring. The law will allow Chinese authorities to impose exit bans on anyone under investigation, whether they are Chinese or foreigners, if they are deemed a potential national security risk after leaving the country.

“Specifically, [the law] defined attempts to acquire the information related to national security or interests as an ‘act of espionage,’ alongside collecting state secrets or intelligence,” Jeremy Daum, senior research fellow at Paul Tsai China Center, Yale Law School, told The China Project today.

Article 54 of the espionage law states that “where acts of espionage are carried out by individuals, but do not constitute a crime, the state security organs are to give warnings or up to 15 days of administrative detention.” Those subject to the law can also be sanctioned by “relevant departments” and receive a fine of more than 50,000 yuan ($7,233).

“It’s important to understand that the terms ‘state security’ and ‘intelligence’ — the previously existing categories in Article 4(3) — were already defined very broadly. Intelligence, for example, was ‘matters that concern state security and interests are either not yet public or should not be made public,’ in a SPC interpretation on criminal violations of intelligence,” Daum told The China Project.

“The result is that state security forces already had an enormous amount of discretion in enforcement, and the revision doubled down on that, rather than fixing the problem. Such broad discretion might be considered necessary in addressing national security threats, but the resulting uncertainty runs counter to rule of law,” Daum added.

Everything boils down to national security under Xi

While Chinese leaders have continuously built in new types of national security since Máo Zédōng 毛泽东, in an effort to cement the CCP’s ruling power, incumbent Party General Secretary Xí Jìnpíng 习近平 has made national security a driving force behind his administration since taking office in 2012.

Xi has enacted a slew of powerful ideological and institutional changes to China’s government, with new laws and regulations that cultivate a state of hypervigilance to enforce the “securitization of everything.”

“Over the past decade, China has increasingly emphasized a “holistic view of national security” (总体国家安全观 zǒngtǐ guójiā ānquán guān), which emphasizes consideration of potential security risks in all areas. This phrase and the idea behind it can be found in the espionage law,” Daum told The China Project.

The original version of the espionage law, passed in 2014, was already ambiguous and subject to interpretation, making it a powerful legal tool. But new revisions have allowed for a rapid expansion of what constitutes as national security, specifically designed to not only avert threats, but proactively defend against any new ones.

“The most directly on-point laws are the 2014 Counter-Espionage Law (largely transplanting the former National Security Law), the 2015 National Security Law (now broadly defining national security goals, duties, and concepts), and the 2017 National Intelligence Law,” Daum said. In 2017, Beijing also launched a campaign that offered rewards of up to 500,000 yuan ($1,500 to $73,000) to encourage citizens to support suspicious activities that could harm national security.

In 2021, following the 2014 release of the original espionage law, China released two important documents: the law’s detailed implementation rules, as well as provisions on counter-espionage precautions. The two “are now partially incorporated into the law itself,” he added.

The revisions to the espionage law come a few months after Beijing announced a sweeping bureaucratic makeover to consolidate power and oversight over key industries in March, during China’s biggest political gatherings of the year. As part of a broader effort to reform the State Council, Beijing proposed plans to set up a new financial regulator, restructure the science and technology ministry, and create a department to oversee China’s massive troves of data.

Xi had also called to “more quickly” build up China’s military and to enhance “integrated national strategies and strategic capabilities” to a room full of the People’s Liberation Army and the People’s Armed Police Force delegates at the 14th National People’s Congress. He stressed more self-reliance in strategic fields, such as supply chains and science and technology, to make them “more capable of safeguarding national security.”

Exit bans are on the rise in China

Meanwhile, China is increasingly barring more people from leaving the country, according to a new report from Madrid-based rights group Safeguard Defenders. The expansion of the espionage law increases the risks faced by human rights defenders, journalists, and even foreign executives in China.

Between 2018 and July of this year, when the new revisions to the espionage law kick in, “no less than five new or amended laws provide for the use of exit bans, for a new total of at least 15 laws,” the Safeguard Defenders report states.

Those laws come as a growing number of Chinese people and foreigners have been ensnared by exit bans, which can be used by authorities to prohibit a person from entering or leaving a country. A Reuters analysis also indicated a surge in court cases involving such bans in recent years.

While there is a lack of transparent official data, the Safeguard Defenders report estimates that “at least tens of thousands of people in China are placed on exit bans at any one time.” Many of these exit bans violate Article 13 in the United Nations’ Universal Declaration of Human Rights, which entitles everyone the right to move freely “within the borders of each state” and “to leave any country, including [their] own, and to return to [their] country.”

A spate of recent high-profile national security arrests

The revisions to the law have come amid a series of arrests and detainments of prominent individuals on espionage charges in recent years. Some are concerned that the broader scope of the law could be used to target anyone deemed a threat to the stability of the CCP.

Even in the past two months, a number of high-profile cases have demonstrated the growing risks to individuals in China.

Yang Chih-yuan (杨智渊 Yáng Zhìyuān), the 33-year-old founder of the now-dissolved pro-independence Taiwanese National Party, was formally arrested in China on secession charges more than eight months after he was detained in August 2022. He was detained, one day after former U.S. House speaker Nancy Pelosi arrived for her controversial visit to Taipei, and has been held in custody in Wenzhou, Zhejiang Province, for supporting “separatist” activities and endangering national security.

Dǒng Yùyù 董郁玉, a 61-year-old senior columnist and editor at Guangming Daily, one of the CCP’s major newspapers, has been detained in Beijing for espionage for more than a year, his family reported last week. Dong had often met with foreign diplomats and journalists for decades, which his family said were “a normal part of his job and a normal interaction between peoples in most parts of the world.” But he and a Japanese diplomat were arrested while eating lunch at a hotel restaurant on February 21, 2022, and those interactions are now being scrutinized by authorities as evidence that Dong was working as a foreign agent for either Japan or the U.S.

Xǔ Zhìyǒng 许志永 and Dīng Jiāxǐ 丁家喜, 50 and 55, were two prominent human rights activists and members of the New Citizens’ Movement, a loose network of activists founded by Xu in 2012 to promote constitutionalism and government transparency. On April 10, they were both sentenced to 14 years and 12 years in prison by a court in Shandong Province on charges of state subversion, after spending more than three years in detention. They were tried separately behind closed doors. Their lengthy punishments mark some of the most high-profile dissidents to be convicted by Beijing.

An unnamed Japanese local executive of Astellas Pharma, a top Japanese drugmaker, was arrested under espionage charges in Beijing while about to board a flight back to Japan in March. Beijing’s new ambassador to Tokyo, Wújiāng Hào 吴江浩, said that “the core of this incident is that it is a spy incident that touches on China’s national security. That fact is becoming more and more certain.” While the unusual arrest of a senior executive at a prominent corporation stunned the Japanese business community, with some reassessing their operations in the country, the company’s CEO later stated that they “are not considering an exit from China” despite rising geopolitical risks.

“It’s hard to know much about the specific cases, in part because cases involving national security interests are generally handled more secretively,” Daum told The China Project. “However, even the appearance of arbitrariness harms China’s attempts to show that it is ‘open for business,’ as do limitations on foreign press and any overtly political or speech based prosecutions. Domestically, national security interests probably aren’t in the front of most people’s thoughts, but it has been increasingly clear that foreign contacts can be a liability for those working in sensitive areas such as law and journalism.”

A chillier business environment and obstacles to ordinary business research

The legal revisions, which include cyber attacks targeting China’s key information infrastructure, have raised concern over the business environment in China, as Beijing ramps up scrutiny over foreign enterprises operating in the world’s second largest economy.

China has been gradually developing a robust data protection scheme in its legal system over the past several years, “including the cybersecurity law, the data security law, and the personal information protection law,” Daum told The China Project.

“Recognizing the value that data has both in terms of national and personal security, as well as its commercial value (China is also developing a system of regulated data exchanges for data trading), China has increasingly sought to keep its localized handling of its data, imposing special requirements for the export of some important data,” Daum added. “New language in espionage aligns with this authority.”

The Wall Street Journal reported that Chinese authorities have imposed new restrictions on one of the most crucial databases in China. The report cited a number of “foreign think tanks, research firms, and other non financial entities” that were unable to renew their subscriptions to Shanghai-based Wind Information, which provided important economic and financial information used by analysts and investors both inside and outside China.

Earlier in April, Chinese authorities questioned employees at Bain, the U.S. management consulting firm, during a surprise visit to the company’s Shanghai office. While nobody was detained, police did take away their computers and phones. And less than a month ago, American due diligence firm, the Mintz Group, released a statement confirming that five Chinese nationals working employed by the company in Beijing were detained by authorities, who later shut down the branch.

On April 20, U.S. Treasury Secretary Janet Yellen voiced concerns about “a recent uptick in coercive actions targeting U.S. firms, which comes at the same moment that China states that it is reopening for foreign investment.”

The incidents underscore the chillier environment for businesses in China, as ties between Beijing and Washington continue to deteriorate.

“As implementation of all these rules continues to develop, we might see continued shifts in what information is readily available online as service providers update systems and user agreements in their efforts to comply,” Daum said. “While loss of access to information (temporary or permanent) is harmful to scholars and business folks alike, the deeper harm comes from increased feeling among foreign groups that China’s rules are erratic and subject to rapid changes that could undermine one’s business or activities.”

“These are tough times, and China is not alone in increasingly viewing the world through a broad national security lens. International relations, particularly between the U.S. and China, are at a low point, and suspicions are running wild. Chinese security forces have long had an essentially free hand in addressing security threats, and the new law further enshrines that status quo,” Daum said. “The extent of enforcement is still unclear, and that’s part of the problem.”