China asked some state-run enterprises to avoid business trips to the U.S. and its allies and to take extra precautions to protect their devices if they need to travel, according to people familiar with the request.
In recent weeks, the State-Owned Assets Supervision and Administration Commission — a regulatory body that oversees about 100 government-run companies — has told some firms to only take secure, company-issued laptops meant for overseas use if traveling is necessary, the people said. They said the warning extended to the other countries in the Five Eyes intelligence-sharing pact: the U.K., Canada, Australia and New Zealand.
The order also said that employees should have the company verify which files they are carrying on any trip and only store them on secure USB flash drives, two people familiar with the warning said separately, adding that SASAC didn’t specify how long the travel rules will apply. The commission didn’t respond to a fax requesting comment.
Chinese and American executives have become more cautious when traveling after the December arrest of Huawei Technologies Co. executive Meng Wanzhou in Canada on behalf of the U.S., and the subsequent detention of two Canadian citizens in China. The U.S. has also stepped up efforts to catch and prosecute executives at Chinese companies that it alleges steal technology, which has resulted in several legal actions.
In January, state-owned Fujian Jinhua Integrated Circuit Co. and its Taiwan-based partner United Microelectronics Corp. were the first companies indicted under the U.S. Justice Department’s new initiative. The companies pleaded not guilty. China has repeatedly denied accusations of trade secrets theft.
Meng was charged with conspiracy to defraud banks in relation to transactions that violated U.S. sanctions against Iran, an allegation that comes as the Trump administration seeks to limit Chinese telecom companies from dominating 5G wireless networks. She has denied wrongdoing.
Tensions between Beijing and Ottawa have also risen after a Chinese court sentenced a Canadian man to death for drug trafficking after a one-day retrial. The move prompted Canada to update its travel advisory for China, urging its citizens to “exercise a high degree of caution in China due to the risk of arbitrary enforcement of local laws.”
“As long as foreigners including Canadians abide by the law, their freedom and safety is guaranteed,” Chinese foreign ministry spokeswoman Hua Chunying told reporters at a regular briefing on Tuesday in response to the travel advisory. “It is Canada, not China, that is arbitrarily detaining foreign citizens under the guise of the law.”
(Updates with increased China-Canada tensions in last two paragraphs.)
–With assistance from Haze Fan and April Ma.
©2019 Bloomberg L.P.