Limiting Public Exposés: China’s Crackdown on Information about Officials and Social Elite

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There is a chilling crackdown on due diligence companies in China. In an effort to tighten access to company records at local industry and commerce bureaus, the Chinese government arrested Peter Humphreys and his wife, who run a due diligence company that works for many multinational companies in China. Access to these bureau records is often the only way that short-sellers, journalists and due diligence firms have to trace corporate ownership and expose suspicious business relationships as markers of fraud.

Questions:
1. Explain what the implications of this are for other due diligence firms in China.
2. According to the article, why won’t these new laws drive the information trade out of China?
3. According to Dan Harris, what are the purposes of China’s new laws on personal or sensitive information?

Swanson, A. (2013). China’s Chilling Crackdown on Due-Diligence Companies, The Atlantic, Oct. 23 (Retrievable online at http://www.theatlantic.com/china/archive/2013/10/chinas-chilling-crackdown-on-due-diligence-companies/280787/)