US consultancy firms such as McKinsey and Boston Consulting Group appear to be caught up in the row between Washington and Beijing over alleged cyber espionage and theft of trade secrets.
The Financial Times reported on Sunday that China has ordered its state-owned enterprises to snap ties with US consulting companies because of fears they are spying on behalf of the US government.
The directive 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, the paper said, citing sources close to senior Chinese leaders.
Beijing’s reaction to the indictments was swift, with the state media describing the US as a “mincing rascal” and “high-level hooligan”. The decision to ban state enterprises from working with western consulting companies marks a further escalation in China’s response.
“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,” FT quoted a senior policy adviser to the Chinese leadership as saying. “Right now the foreigners use their consulting companies to find out everything they want about our state companies.”
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