March 25 (UPI) — Chinese authorities released five local employees of U.S. consulting firm Mintz Group, two years after they were arrested in a raid on its Beijing offices in March 2023 that saw the firm pull out of China, shuttering its operations both in the capital and Hong Kong.
“We understand that the Mintz Group Beijing employees who were detained, all Chinese nationals, have now all been released. We are grateful to the Chinese authorities that our former colleagues can now be home with their families,” the company which specializes in due diligence, including background checks, told the Financial Times.
The unnamed staff were charged with performing work that was not consistent with the firm’s license to do business in China, but it was unclear if all matters related to the legal case have been concluded.
Mintz said at the time it had received no legal notification or explanation regarding the raid; however, the FT said it had previously reported Beijing Municipal Bureau of Statistics claims that the firm had conducted 37 “foreign-related statistics” investigations between 2019 and 2022 without obtaining permission, as required by law.
In 2023, the firm paid a fine of approximately $1.5 million imposed by the bureau for engaging in “unapproved statistical work.”
The arrests marked the first of a series of official probes of other U.S. companies that provide consulting and due diligence services to foreign firms doing business in China, including Bain & Co., and Capivision Partners, that has had a chilling impact on the expatriate business community over fears they could be personally targeted.
Bain continues to operate offices in Beijing, Shanghai, and Hong Kong, but provides traditional management consulting to very big companies, advising CEOs on how they can boost performance.
Due diligence review-type work, by contrast, involves digging around to help prospective investors uncover potential red flags with a company they plan to go into business with, as well as getting the measure of the competition.
The freeing of the Mintz workers comes amid a drive by China to attract more foreign investment into the country after a massive drop-off of almost 40% in Foreign Direct Investment since 2022, a slowdown of its economy from the double-digit GDP growth seen in the first decade of the century and a looming threat from rising global trade tensions.
Beijing rolled out the red carpet earlier this week for dozens of multinationals at its annual China Development Forum, including Apple, Boeing, Pfizer and at least five other of the United States’ largest companies, as well as European giants such as AstraZeneca.
Hosted by Chinese Premier Li Qiang and Vice Premier He Lifeng, the government used the event to tout for more investment from overseas firms as it continues to open up its market and make the case against what it sees as the protectionist policies of U.S. President Donald Trump, who has doubled tariffs on Chinese goods to at least 20%, imposed 15% tariffs on Mexico and Canada and minimum 25% tariffs on all steel and aluminum imports.
Chinese exports of U.S. steel and steel products hit 54,857 tons in January alone, an almost 95% jump from the same period last year, according to U.S. Census Bureau figures, despite already crippling tariffs of 50%.
FDI is where a foreign investor, company, or government acquires or takes an active stake in, a domestic company or venture in a long-term commitment. The relationship is not generally a purely financial investment, as in a stock investment, and the target could be private or public.
