BEIJING – An American research firm has been fined $1.5 million by China’s government in a crackdown on information-gathering that has rattled foreign investors.
Mintz Group was one of a series of foreign consultants that were raided starting in April after Chinese leader Xi Jinping's government announced expanded anti-spying rules that left companies unsure what they were allowed to do.
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Mintz Group illegally engaged in “foreign-related statistical investigation activities without obtaining approval,” the Beijing Municipal Bureau of Statistics said in a notice dated July 14 on its website. It gave no details of the violation but said Mintz Group was fined 10.7 million yuan ($1.5 million).
Mintz Group does background checks on employees and business partners and gathers other information for corporate clients.
Xi's government has tightened the ruling Communist Party's control over the economy and society, including by launching data security crackdowns and expanding restrictions on what information can be moved abroad.
That has shaken foreign companies at a time when Xi’s government is trying to revive investor interest in China as part of efforts to reverse a deepening economic slump.
Mintz Group said in April its Beijing office was raided by police and five employees detained. Bain & Co. said its staff in Shanghai were questioned by police. State media said in May offices of Capvision were raided by the foreign intelligence agency in Beijing, Shanghai and at least two other cities.
The British Chamber of Commerce in China said in May a survey found companies want “greater clarity” about how newly expanded anti-spying and other rules will be enforced before they go ahead with new investments.
This month, one of the world’s biggest law firms, Dentons, announced it was separating from a Chinese firm that has been part of its global network for eight years due to changes in data protection and cybersecurity rules.
Chinese companies have faced bigger penalties for data security violations.
In 2020, ride-hailing firm Didi Global was fined more than 8 billion yuan ($1.2 billion) by the internet regulator on charges of improperly collecting and handling data on millions of users.