Chinese police visiting Bain & Co’s Shanghai office is business as usual

Bain & Co.'s office in China recently received some unexpected visitors.

According to Financial Times which reported this incident yesterday (April 26, citing six sources familiar with the matter), the Chinese police visited the US management consulting firm's Shanghai office unannouncedly two weeks ago to question employees.

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According to reports, the police confiscated computers and mobile phones but didn't hold any employees under their custody.

Bain's visit is part of an ongoing cycle of increased scrutiny of foreign companies in China as tensions rise between Beijing and Washington. Bain is not an exception. Several foreign companies have been the target of China's recent policing. Li Qiang's recent claim that "China would open its doors wider and wider to foreign entities" is a mere lip service.

Michael Hart, president of the American Chamber of Commerce in China told the BBC that the Chinese government had always said they welcomed foreign investment. However, recent actions against US companies in China have sent the opposite signal. "Our business community is scared, and members of our organization are asking 'Who's Next?' Regardless of the government's intentions, this is the message that has been received."

Bain has three offices in China, in Shanghai, Beijing and Hong Kong.

Bain has operated its Shanghai office for 19 years

Bain in China has 200 employees who provide consulting services to a variety of Chinese clients including Jack Ma’s Alibaba and Li Auto, a startup electric vehicle company.

In 2018, the Trump administration implemented sweeping tariffs on Chinese imports. Since then, the situation has only gotten worse. To China's dismay, the US has, along the way, condemned the genocide against Uyghur Muslims and boycotted 2022 Beijing Winter Olympics. It also showed solidarity with Taiwan. In 2022, US President Joe Biden met with Chinese Premier Xi Jinping in Indonesia for the first personal meeting during Biden's tenure to repair bilateral relations. In February, however, efforts to repair bilateral relations were sabotaged when the US shot what they claimed was a Chinese spy ballon. China insists that it was an innocent weather satellite which had drifted from its course.

"[W]e're concerned about the recent increase in coercive measures against US firms that comes at the moment when China announces that it will reopen for foreign investment."

Janet Yellen, US Treasury secretary

Mintz Group: Chinese officials raided Beijing's office of Mintz Group, an American corporate due diligence company. The office was closed and five Chinese employees were detained.

Deloitte China: The largest of the Big 4 Consulting firms was fined $30.8 million for alleged auditing errors and its Beijing operation was suspended for three months. This is on top of the state-owned companies being asked to discontinue contracts with Big 4.

Astellas Pharma : China has detained an executive of the Japanese pharmaceutical giant over espionage allegations.

China's cybersecurity regulator has launched an investigation into US memory chip maker Micron Technology on the grounds of national security. Lester Ross is the chair of the American Chamber of Commerce's policy committee. He said that China is lacking in transparency when it comes to many laws and policies. This is just one example.

Raytheon, Lockheed, the Chinese government has been preventing senior executives from the US-based defense companies, including Lockheed and Raytheon, from entering the country, working there, or residing here for the past two months. The two firms that are close to the military have also been sanctioned.

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