Sanpo-yoshi Communication

President's Column] Revision of Anti-Spying Law

An employee in his 50s of a major Japanese pharmaceutical company was arrested by state security authorities for espionage in China and has been in custody for 18 months, and has recently been indicted by Chinese prosecutors, according to media reports. It seems inevitable that he will be imprisoned for a longer period of time. Although it is not clear what kind of acts were deemed to constitute espionage, we cannot help but feel deep sympathy for the fear and despair felt by the individual and the family. I had thought that this was due to the weak attitude of the Japanese government, but it seems that this is not the case. Similar detentions are occurring in the U.S. and EU companies.
The Anti-Spying Law was revised in July 2023, expanding the scope of espionage to "documents, data, materials, and articles relating to national security and interests" and operating with unclear standards. Considering this risk, some of our business partners are refraining from business trips to China.
In addition to this, it seems that, surprisingly, some people are banned from leaving the country because of business troubles. According to the June 10, 2024 issue of Nikkei Business (Global Intelligence article), when a businessman went to the airport to return home, he was suddenly stopped by public security, interrogated, and detained as is. It later turns out that a Chinese company with which he does business had appealed to the court and had been ordered to leave the country. It is nothing short of terrifying.

It seems that such an embargo will be lifted only if the Chinese counterparty complies with the request, and even if the case is contested in court, it is unlikely that the company will prevail. They are hostages, so to speak. There have been more than 100 cases in the past 10 years in the U.S. and Europe, just as far as is known. The article states that prosecution has been filed, or there are signs or suspicions of prosecution. It clearly states that if you are in business trouble, you should refrain from business travel.
More than 20% of Japan's GDP is exported, and although the amount of exports to China has been declining in recent years, we still cannot ignore the huge market with a population of over 1 billion in the neighboring country, and China is practically our No. 1 export partner when Hong Kong is added. In Ryo Takasugi's novel "Excellent Company: When the Fire Burns," he describes the story of a medium-sized Japanese food manufacturer (Toyo Suisan, perhaps) that overcomes various difficulties, including labor problems and sexual harassment lawsuits, to successfully enter the American market. How to deal with this market is expected to be a difficult task.

Not that I'm worried about a company with 100% domestic demand...

Yoji Hiraki