Chinese police have visited the Shanghai offices of Bain & Company and questioned employees of the US management consulting group, in the latest case of increased surveillance of foreign companies in China as tensions between Beijing and Washington rise.
Six people familiar with the situation said Chinese police made a surprise visit two weeks ago. Police took away computers and phones but did not arrest any team members, according to two people briefed on the incident.
Three of the people said the police made more than one visit to the offices of the Chinese financial hub. The incident comes after authorities last month raided the Beijing office of the American due diligence company Mintz Group and detained five local employees.
It is still unclear why the police went to Bath and whether he was directly related to the blue chip consultancy firm or any of its clients.
Following the publication of the FT story, Bain confirmed that police visited his office.
“We can confirm that Chinese authorities have interviewed staff in our Shanghai office. We are cooperating appropriately with the Chinese authorities,” he said. “At this time, we have no further comments.”
The US Embassy in Beijing and the American Chamber of Commerce in Shanghai, a lobby group of about 1,500 US companies, declined to comment.
Executives of consulting companies China and other companies have privately speculated about the incident since it happened, according to multiple people.
The raid has particularly stoked concern among American businesses who were already worried about signs that Beijing could step up retaliatory measures because of the measures taken against Chinese companies by the administration of Joe Biden.
US Treasury Secretary Janet Yellen last week expressed concerns about what she described as “a recent increase in enforcement actions targeting corporate America.”
In recent weeks, China’s powerful internet regulator opened an investigation in Idaho-based memory chip maker Micron Technology on national security grounds and arrested a senior executive at Japanese company Astellas Pharma for espionage.
Chinese authorities have also suspended Deloitte’s operations in Beijing for three months and hit accounting firm Big Four with a record fine for shortcomings in past audits. The Commerce Department last week banned several Raytheon and Lockheed Martin executives from entering the country and banned Chinese groups from selling to the two US defense contractors.
At the same time, Beijing is rolling out the red carpet to some U.S. companies critical to its future, like Apple, raising concerns in Washington about its willingness to target some companies while courting others.
Senior Chinese officials, including new Prime Minister Li Qiang, have been keen to portray the country as open for business to bring back foreign investment and help restart an economy battered by zero-Covid lockdowns.
Bain employs more than 200 people in China and its consultants have advised many Chinese companies, from tech giant Alibaba to electric vehicle start-up Li Auto.
In Shanghai, the base of most of Bain’s Chinese teams, the group has developed a close relationship with senior officials through the International Business Leaders Advisory Council, a prestigious advisory group to the mayor of Shanghai.
Bain has been with the group since 2008 and Orit Gadiesh, chairman of the consultancy, served a three-year term as IBLAC chair.
Consulting group partners are also regular commentators in Chinese state media, often making bright predictions for the country’s economy.
Additional reporting by Edward White in Seoul, Joe Leahy and Sun Yu in Shanghai and Primrose Riordan in Hong Kong
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