Detainment Of US Executive In China Reveals Rising Business Tensions, Questionable Practices

Recent events in China have cast a shadow over its business relations with foreign entities.

What Happened: A high-ranking executive from the U.S.-based risk advisory firm Kroll, has been detained in mainland China for over two months, amplifying concerns regarding foreign corporations' challenges in the Chinese business environment.

Throughout the year, China has exhibited a hardened stance towards foreign enterprises. Such actions include unexpected raids on the offices of due-diligence firm Mintz Group and unexpected interrogations of the staff of U.S. consulting firm Bain & Co.   

This aggressive approach has led to a significant dip in American businesses' trust in China, reaching its lowest in several decades, according to The Wall Street Journal.

Kroll, which provides risk and financial advisory solutions, was in the spotlight when Michael Chan, a managing director based in Hong Kong, traveled to the mainland. He later informed his superiors about his restriction, saying he could not leave the country.

Chan previously collaborated with Borrelli Walsh, which provides similar services as Kroll. Kroll acquired Borrelli Walsh in 2020 and has branches in several Chinese cities, including Beijing and Shanghai.

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Sources reveal that Chan is assisting an investigation related to a case from a few years ago. Notably, neither Chan nor Kroll is the primary focus of this investigation.

Another incident involved a senior investment banker from Nomura, who told his company about his restriction from leaving China. He is currently collaborating with an inquiry connected to a previous employer.

According to the report, China's Ministry of Public Security and the National Immigration Administration have not commented on Chan's situation.  

Photo: Shutterstock

Earlier actions include a raid on the Beijing offices of Mintz Group and unexpected visits to Bain's Shanghai office. Additionally, Capvision, a consulting firm, faced police raids in various cities over alleged breaches of national security regulations.

The U.S. State Department has even reportedly reconsidered travel to China due to the country's unpredictable law enforcement practices. China has dismissed these concerns as politically motivated.

Chinese regulators have tightened their business sector grip, frequently citing national security concerns. This includes a revamped anti-espionage law introduced in July, further amplifying foreign businesses' apprehensions.

Now Read: China A 'Ticking Time Bomb,' Says Biden Amid Rift With Xi Jinping: 'When Bad Folks Have Problems, They Do Bad Things'

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Shutterstock