State-owned companies or those affiliated with the government are distancing themselves from multinationals offering legal, investment and consultancy services, fearful of being associated with foreign entities.

Multinationals themselves were once welcomed with open arms to help accelerate China's economic and technological development. Now, they find themselves entangled in a complex web of regulations governing the cross-border transfer of data and other information. Many are considering decoupling their data and IT systems from China.

From an individual standpoint, anyone with foreign affiliations, including those who have returned from overseas, feel as if they are on a kind of community“watch list” upon arrival in China.

Some Chinese firms indicate in recruitment drives for new employees they will not consider applicants who have returned from certain overseas regions. The perception is they may have been exposed to foreign forces who use money, friendship or even romance to coerce them into becoming an undercover agent or informant.

An invisible net has been cast over every stratum of Chinese society. Many Chinese people will no doubt become more hesitant in their interactions, cautious in their communication and skeptical in their collaborations. This will only further encourage people to retreat into silence or resort to coded language in both face-to-face conversations and social media.

And those perceived as having divergent political or ideological views will especially be under scrutiny. This includes private businesspeople, entrepreneurs and those working in non-government sectors who openly voice political or ideological values that go against the Communist Party.

The expansive nature of the law evokes memories of the Cultural Revolution, an era in which little trust existed in society and even among family members.

An unsettling divide is emerging today between those in governmental circles and everyone else. Having a foreign diploma or other affiliation was once seen as a positive, offering one a different perspective and international experience. Now, however, it could be seen as a liability or even a crime.

The first iteration of the anti-espionage law was enacted in 2015 and was aimed at bolstering national security and generally protecting against espionage activities detrimental to the country's interests.

The updated law comes in a changed world. The rivalry between the US and China has escalated in recent years in trade, technology, defense and influence over global institutions. Both nations are actively engaging in intelligence operations to understand each other's capabilities, intentions and vulnerabilities.

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Because the new law is so expansive and ambiguous, however, the implementation and enforcement could be difficult. And it could diverge significantly from the initial objectives of lawmakers.

When laws are ambiguous, it leaves ample room for interpretation and potential exploitation. The lack of clarity with the revised anti-espionage law could give rise to witch hunts, leaving people vulnerable to accusations that lack substantial evidence.

The ripple effect could extend beyond China's borders, affecting academic exchanges, technological cooperation and diplomatic relations.

If collaboration with the outside world becomes secondary to perceived threats, it could also deter both foreign investment and domestic private enterprises in China, stifling economic growth.

At a time when the Chinese economy is grappling with domestic challenges and an increasingly hostile global environment, this could hasten the“decoupling” from China that many in the West are already advocating for.

Marina Yue Zhang is Associate Professor, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article .

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