China: Geopolitical Tensions Heighten Risks to International Business Operations and Travel

Rising geopolitical tensions between China and the US underpin many of these developments. Disputes over Taiwan, export controls on semiconductors, and intellectual property have escalated mistrust. The US government’s tightening of technology exports to China has triggered retaliatory actions, including regulatory probes and sanctions. This dynamic heightens the risk environment for foreign businesses, particularly during sensitive political periods such as the lead-up to major diplomatic summits or domestic Chinese political events like the National People’s Congress. 

Several governments have responded by updating travel advisories. The US Department of State warns of exit bans and device confiscation, especially for dual nationals and those involved in sensitive sectors. The Canadian government similarly cautions about similar enforcement of local laws. Beyond Western nations, India’s embassy in Beijing has advised SMEs to exercise caution due to unclear legal processes, while Singapore’s Ministry of Foreign Affairs stresses compliance with China’s Exit and Entry Administration Law. 

Recent developments in July demonstrate a consistent trend of Chinese authorities applying legal and administrative measures that increasingly affect foreign nationals and multinational companies in China. In Chengdu, a US government employee was barred from leaving the country due to alleged visa disclosure violations. In Shanghai, a US banker employed by Wells Fargo faced an exit ban linked to an undisclosed criminal investigation. Consequently, Wells Fargo suspended all staff travel to China as a precautionary measure. Both individuals involved in these cases are US citizens of Chinese descent.

China has increasingly used legal and administrative measures to restrict the movement of foreign nationals during periods of diplomatic tension or regulatory scrutiny, reinforcing a broader pattern of state-imposed risk for international personnel. In 2023, Chinese authorities raided the Beijing office of US due diligence firm, Mintz Group, detaining five local employees, and questioned staff at Bain & Company’s Shanghai office. Additionally, a Japanese pharmaceutical company employee was detained the same year on spying allegations. These incidents underscore an increasingly unpredictable environment for foreign nationals working in China, especially in sectors related to consulting, research, technology, and strategic industry analysis.  

The legal framework governing these restrictions stems largely from the Exit and Entry Administration Law. Enacted in 2013, the legislation grants Chinese security agencies broad authority to restrict movement and seize assets of foreign nationals. Foreign individuals affected by these measures frequently experience limited access to detailed information or formal legal recourse, complicating their ability to respond effectively.

Beyond exit bans, Chinese authorities have expanded regulatory scrutiny across a range of sectors. Recent anti-monopoly investigations involving major technology firms underscore Beijing’s efforts to regulate the digital economy and reinforce oversight of platforms deemed critical to national interests. The investigations are often linked to data security and competition concerns and have resulted in fines, operational restrictions, and increased compliance demands. Foreign companies operating critical information infrastructure or engaging in technology-related industries face heightened inspections and demands for access to proprietary information and encryption keys under China’s Cybersecurity Law and related regulations. 

Data security concerns are driving multinational corporations to adopt stringent internal policies. For example, BlackRock has prohibited employees from bringing corporate devices into China and issues temporary hardware without sensitive information. Similar measures have been reported by Apple and Microsoft, which have segmented networks and restricted cross-border data flows to mitigate exposure. Multinational companies have taken such measures due to regulatory requirements, fears of compelled data disclosure, and intellectual property risks.

To cope with these risks, foreign companies have adopted multi-layered strategies. These include limiting employee travel to China, particularly for non-essential trips; restricting the use of corporate devices within the country; issuing China-specific laptops that exclude sensitive data; and seeking explicit legal assurances from local partners regarding data protection. Some firms have also begun reassessing their long-term presence by exploring selective market disengagement or restructuring operations to reduce vulnerability to regulatory actions.

Triggers that could exacerbate these risks include further deterioration of US-China relations, shifts in China’s domestic political environment emphasizing security, and major international events that heighten geopolitical tensions. As these factors evolve, companies operating in China will need to continually adapt their risk management and operational strategies to navigate an environment marked by growing legal complexity and regulatory unpredictability.

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