China has become too risky for businesses, said US Commerce Secretary Gina Raimondo. She said US companies have told her that they face many challenges in the Chinese market, such as fines, raids and other actions. Some of the major hurdles to doing business in China are:

Raids and fines: Several consultancy and due diligence firms, including Mintz Group, Bain & Co, and Capvision Partners, have been raided by Chinese authorities in recent months. Mintz Group was fined about $1.5 million for conducting “foreign-related statistical investigations” without approval. The company said it was ready to work with the Chinese authorities to “resolve any misunderstanding”.

Exit bans: China has been increasingly preventing people, including foreign executives, from leaving the country. A Reuters analysis found an eightfold increase in cases mentioning exit bans in China’s Supreme Court database between 2016 and 2022.

Slow regulatory approvals: Some foreign mergers and acquisitions have been delayed or scrapped due to China’s slow antitrust review process. Intel Corp and DuPont De Nemours Inc both abandoned their deals to buy Israeli and American chipmakers, respectively, after failing to get approval from Chinese regulators.

Counterespionage law: China passed a sweeping update to its anti-espionage legislation in April, which bans the transfer of any information related to national security and broadens the definition of spying. The law has alarmed the United States, which has warned that foreign companies in China could be punished for regular business activities.

Questions about due process: US Commerce Secretary Gina Raimondo said there was “no rationale given” for China’s actions against US chipmaker Micron Technology, whose products were restricted by Beijing earlier this year. She said there was “limited due process” in China’s enforcement of its laws.