China has ordered state-owned enterprises to cut ties with US consulting companies such as McKinsey and Boston Consulting Group because of fears they are spying on behalf of the US government, according to people close to senior Chinese leaders.
The instruction comes days after the US justice department indicted five People’s Liberation Army officers on charges of cyber-espionage and stealing trade secrets from US corporations including Alcoa, US Steel and Westinghouse.
Beijing’s public response to the indictments was swift, with a propaganda campaign in Chinese state media describing the US as a “mincing rascal” and “high-level hooligan”. The decision to ban state enterprises from working with western consultancies marks a further escalation in Beijing’s response.
Management consultancies including Bain & Company and Strategy& – formerly Booz & Co – have extensive operations in China, which remains a rapidly growing market for them.
“The top leadership has proposed setting up a team of Chinese domestic consultants who are particularly focused on information systems in order to seize back this power from the foreign companies,” said a senior policy adviser to the Chinese leadership. “Right now the foreigners use their consulting companies to find out everything they want about our state companies.”
China’s leaders announced on Thursday that all foreign IT products and services sold in China would be subject to a new security screening process. Any company, product or service that fails the test will be banned from China. The vetting will focus on communications, finance, energy and any industries the government considers related to national security or “public interest”, officials said.
Windows 8, the latest operating system from Microsoft, has already been banned in China because of security concerns, state media reported last week.
McKinsey, BCG and Strategy& all declined to comment on the ban but people familiar with their operations said they all still have some Chinese state enterprises among their clients.
Private and multinational companies still make up a significant share of western management consultants’ clients in China so a ban on state business would hurt but probably not cripple their operations in the country.
Additional Reporting by Gu Yu
接近中国高层领导人的人士透露，中国已下令国有企业与麦肯锡(McKinsey)和波士顿咨询集团(Boston Consulting Group)等美国咨询公司断绝关系，担心后者代表美国政府从事间谍活动。
包括贝恩公司(Bain & Company)和Strategy&（原称博斯公司(Booz & Co)）在内的西方管理咨询公司，在中国拥有广泛业务。对它们来说，中国仍是一个快速增长的市场。