Bradley Perret | China needs jobs, but its driving away foreign businesses

In doing so, it's discouraging foreign businesses from investing in its economy at a time when it particularly needs more jobs.

Although Chinese companies are increasingly capable, a lot of people still work for foreign firms or, more likely, foreigners' local partners.

But no one can run an enterprise without adequate information, and three big moves by the government all threaten the process of business research.

The authorities' first target was the Beijing office of the US Mintz Group, which companies hire to do such investigations as checking for fraud, looking into the background of potential partners or finding out where assets have come from or gone to.

Such checking, called due diligence, is important anywhere. In China, where corruption is severe, foreign businesses must be extremely wary of getting involved with crooks.

A foreign maker of medical equipment, for example, may find a possible distributor in China. But does that Chinese company have a habit of selling machines to hospitals by bribing administrators? If so, the foreigners must have nothing to do with it.

So it was bad news when, late in March, the authorities detained five of Mintz's locally hired employees and closed its office.

A fair bet is that Mintz had done nothing wrong. Instead, we can reasonably wonder whether it had in fact uncovered something fishy, just what a client had paid it to look for. In China, fishiness can easily be related to the government.

Next, police last month raided the Shanghai office of the US management consultancy firm Bain & Company, taking away computers and phones, according to the Financial Times. That does not mean Bain itself is accused of wrongdoing; the cops could have been looking for evidence about a Bain client, for example.

Note, however, that much of the work of a management consultancy is research, finding out what's going on in an industry so it can advise its clients.

As nervous foreign business people heard of Bain's trouble, the legislature gave them more to worry about.

In China, it has long been illegal to pass on state secrets - information that has a "vital" bearing on national security and national interests. What is "vital" can be pretty unclear.

But under a new law it will be illegal to transfer information that is "related to" national security - and no one outside the government has any idea of how to define that. With enough imagination, a great range of subjects could be seen in that category - the situation in certain industries, the latest government appointments, scuttlebutt about upcoming changes in regulations, or even demographic trends.

For example, will it be illegal for an analyst to make an observation about the economy that isn't in the official statistics? After all, economic strength has a lot to do with national security.

The uncertainty will suit officials. It adds to their many ways of punishing someone or some company that they just don't like. Examination of a company's email traffic could easily turn up something that can be said to relate to national security.

And if it does, someone will be going to prison.

So, hands up if you want run a business in China.

The object of the law is to limit negative views about China that could spread through research by foreign organisations, such as auditors and management consultants, according to informed business managers in the country interviewed by the Wall Street Journal.

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If so, is the Chinese Communist Party trying to keep unpleasant truths away from the ears of the Chinese people, ensuring that they think it's doing a good job? Or is it trying to deceive foreign businesses and governments? Does it imagine that it can turn the collection and dissemination of business intelligence into a global propaganda exercise under its control?

There's that word that keeps appearing in discussions of the CCP: "control". The party can never get enough of it.

Its exercise of control has always come before the welfare of the people, as becomes more evident with each year of Xi Jinping's reign as president and party general secretary.

The US Chamber of Commerce responded to the raids and new law by saying that doing business in China had become dramatically more risky. "This is a matter of serious concern for the investor community and likely is as well for their local business partners in China," it said.

European and Japanese businesses cannot be far behind the Americans in this assessment.

Let's hope that 15 Australian business leaders who have just gone to China to check out conditions there have also picked up the message.

Because while the crackdown will deter foreign investment, it also means less employment.

Already there are not enough jobs, as China recovers from Xi's three-year zero-COVID campaign, which collapsed in an explosion of uncontrolled infection late last year.

Youth unemployment is near 20 per cent and the government is telling new university graduates to take blue-collar jobs. That idea is far more disagreeable in China than it would be here.

The wealthy southern province Guangdong is even offering to help graduates find jobs in the countryside - a shocking idea in a country that, frankly, looks down its nose at rural work.

It will be a pity for these people if job opportunities now become even scarcer because some foreign enterprises decide they can no longer put up with the risk of operating in their country.