China arrests head of consultancy accused of spying for MI6

09 January 2024 Consultancy.asia 3 min. read
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On Monday, China announced the detention of a foreign national serving as the head of an unnamed foreign consulting firm. Authorities accused them of spy on behalf of the United Kingdom’s MI6 intelligence service.

The Ministry of State Security (MSS), China’s main intelligence agency, claimed in a statement that the individual, identified only as Huang, was collaborating with Britain’s MI6 while working as head of a consultancy. The MSS did not disclose Huang’s full name, gender, or nationality, nor did it reveal the employer of the person.

According to the MSS, Huang began cooperating with MI6 in 2015, engaging in intelligence-gathering activities. MI6 allegedly directed Huang to travel to China multiple times to gather intelligence and identify potential assets.

China arrests head of consultancy accused of spying for MI6

The MSS has claimed that MI6 provided Huang with training and professional spying equipment for the exchange of intelligence and communications.

During the MSS investigation, Huang was granted consular visits in compliance with Chinese law. The British Embassy in Beijing referred inquiries to the U.K. Foreign, Commonwealth, and Development Office (FCDO), which has yet to respond, according to media reports.

This development follows China’s recent crackdown on international consulting firms, including the raiding of offices belonging to New York-headquartered consultancy Capvision and the closure of Mintz Group’s Beijing office. These actions are part of Beijing’s broader efforts to enhance oversight on information deemed sensitive to national security.

In response to the news, Capvision, with headquarters in Shanghai and New York, stated in October that it had successfully completed a ‘national security inspection’ overseen by the Chinese government and implemented new compliance measures.

In another incident last year, Chinese authorities paid a visit to the Shanghai office of consulting giant Bain & Company. Staff members were reportedly questioned on company dealings with no arrests, but the consultancy did not reveal any details.

Espionage in China, like in many other countries in the world, is certainly not taken lightly by authorities. In May of year, an American citizen and permanent resident of Hong Kong was sentenced to life in prison on espionage charges. Such a heavy-handed punishment is rare for foreign citizens living in China, though espionage cases are not so uncommon, especially since the country passed a new and far stricter counter-espionage law in April of last year.

Huang’s arrest is the latest incident in an increasingly heated back-and-forth between authorities in China and foreign companies – particularly American and European companies. This comes within the context of the escalating political tensions between Beijing and the West. While the U.S. is seen as China’s main rival, the country also views most European countries as antagonistic, untrustworthy, and hostile to China’s greater economic and political ambitions.

When it comes to the consulting industry, China has been increasingly weary of due diligence, specifically. That is because the processes involved with due diligence necessitate a large degree of digging around for information on companies, which China sees not as harmless research, but rather as illegal snooping. Most Chinese companies are state-owned and so their information may be considered by authorities to be secret.