The US Chamber of Commerce has warned about increased surveillance of American companies in China, claiming that it has “dramatically increased” the uncertainties and hazards of doing business overseas.
This warning comes after Chinese officials questioned management consulting firm Bain & Company staff in Shanghai and closed down Mintz Group’s Beijing headquarters.
The lobby group notes that despite Chinese officials expressing openness to greater foreign investment, investors will feel unwelcome in an environment where risk cannot be properly assessed, and legal uncertainties are rising, a CNN reported quoting the lobby group.
The cases coincide with rising tensions between the United States and China, which have badly affected the confidence of American businesses operating in the world’s second-largest economy.
China’s counter-espionage law was revised last week, and an amendment is set to take effect in July.
The law widens the scope of materials and data the country deems relevant to national security, further increasing risks for American firms.
The lobby group adds that it is unclear what the long-term implications of the heightened scrutiny will be.
Meanwhile, the US is attempting to slow China’s progress in high tech products without hurting US companies. This is after the US’ microchip export limits, which were enacted last year, have had little impact on China’s technology sector.
The restrictions limited Nvidia’s chip shipments. However, Nvidia has designed variants of its processors for the Chinese market that are slowed down to comply with US rules. Even the delayed Nvidia chips are an improvement for Chinese enterprises, and highlights the US dilemma of halting China’s high-tech advancement.
There are two aspects to the export limitations.
The first limits a chip’s ability to calculate exceedingly exact numbers, limiting the use of supercomputers in military research. The second limitation affects AI by limiting chip-to-chip transfer speeds.
Nvidia has not stated whether it will slow down the processors used for tools like ChatGPT. However, the company has said that the government is not attempting to undermine competition or the US industry and that US enterprises can supply products for commercial purposes.
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