China tells SOEs to drop foreign consultants

Chinese state-owned firms have been ordered to sever ties with US consulting firms such as McKinsey and BCG, Financial Times reported, citing unnamed sources close to top Chinese leaders. The move came just days after the US Justice Department indicted five Chinese army officers of cyber-espionage. The ban on cooperation with state business is expected to harm but not cripple the operations of western management consultants, who continue to work with private and multinational companies. China also announced last Thursday that all IT products and services sold there will be subject to a new security screening process, and that any company, product or service that fails the test will be banned.