• US Commerce head to meet with CEOs after China trip -sources
• [World] Dozens of crocodiles in China escape during floods
• Apple“s iPhone 15 launch clouded by China problems
• Exclusive: Japan elevates Taiwan security ties in move likely to rile China
• China publishes backstory of US “spy“ jailed for life
• Asian stocks steady, Japan, China central banks interrupt dollar“s ascent
• Chinese state media censors itself after highlighting poem about corrupt leaders
• Dozens of escaped crocodiles lurking in floodwaters, Chinese city warns
• [Blogs] Newspaper headlines: 'I'm no China spy' and '1 in 3 female surgeons abused'
• China economic woes could raise Taiwan risks, says US House committee chair
• MPs furious over being kept in dark about alleged spying for China

US Commerce head to meet with CEOs after China trip -sources

https://reuters.com/article/usa-commerce/us-commerce-head-to-meet-with-ceos-after-china-trip-sources-idUSKBN30I1V2

U.S. Commerce Secretary Gina Raimondo expected to meet with the chief executives of major American companies this week, two weeks after a trip to China where she raised concerns about business conditions, sources told Reuters.

Raimondo was to address the Business Roundtable, an association of more than 200 CEOs of major U.s. firms, in Washington on Thursday. She said last month she had spoken to more than 100 U.S. company CEOs ahead of her trip to China about difficulties doing business there.

The Commerce Department did not immediately comment.

Raimondo in China talked up American companies' desire to do business in China and her hopes for further engagement with Chinese officials on market access.

On Aug. 30 in Shanghai, Raimondo said she hoped to "see some results" in the next few months as a result of her four-day visit to Beijing and Shanghai.

"There is appetite among U.S. business to continue to do business" in China, she said. "U.S. businesses want to do business here but they need to have a predictable regulatory environment."

Earlier, Raimondo said American companies had complained to her that China has become "uninvestible," pointing to fines, raids and other actions that made it risky to do business in the world's second-largest economy.

Wrapping up her trip she said: "For U.S. business in many cases patience is running thin and it's time for action."

Raimondo said U.S. companies faced new challenges, among them "exorbitant fines without any explanation, revisions to the counterespionage law, which are unclear and sending shockwaves through the U.S. community; raids on businesses – a whole new level of challenge and we need that to be addressed."

[World] Dozens of crocodiles in China escape during floods

https://www.bbc.co.uk/news/world-asia-china-66784618?at_medium=RSS&at_campaign=KARANGA

Apple“s iPhone 15 launch clouded by China problems

https://reuters.com/article/apple-event/apples-iphone-15-launch-clouded-by-china-problems-idUSKBN30I0KH

Apple (AAPL.O) on Tuesday is expected to unveil a new iPhone 15 lineup as questions about market access in China and competition hang over the world's most valuable listed company.

The iPhone made up more than half of Apple's $394.3 billion in sales last year, but it faces new challenges with selling in China, the Cupertino, California firm's third-largest market.

Apple's latest phones are expected to have new charging ports, titanium cases and cameras, but their debut at its Apple Park headquarters at 10 a.m. PT (1700 GMT) will come as the Chinese government has expanded some restrictions on using iPhones.

Apple will also have to grapple with competition from Huawei Technologies (HWT.UL), which was its top rival in China's premium smartphone market until U.S. export controls ruined Huawei's phone business in 2019. Last week, Huawei started selling the Mate 60 Pro, a high-end phone that uses Chinese-made chips that some U.S. lawmakers believe were manufactured in violation of U.S. trade curbs.

Huawei wants to gain an edge on Apple with add-on features like satellite calling that relies on China's government-backed network. Apple's current iPhone lineup includes satellite capabilities, though they are meant only for emergency situations.

Apple on Tuesday is likely to focus on its new product lineup. By far the biggest change for most Apple customers will be a switch from Apple's propriety "Lightning" charging cables to USB-C, a standard that Apple already uses on its laptops and some high-end iPads.

Apple was forced into the change by European regulations, but analysts believe that the company will position the change as an upgrade, taking advantage of faster data speeds that can transfer high-quality videos made with iPhones.

Analysts are also expecting a new "periscope" camera technology that could give phones better zoom capabilities and titanium cases, as well as upgraded chips. Such "periscope" lenses can use mirrors or prisms to get a longer lens without having to make the camera module much larger.

The biggest question of the day will be whether Apple reserves those features for a new top-end device and makes smaller upgrades to its cheaper models.

"Just like we saw people who aren't Ultra athletes buy the Apple Watch Ultra, we're going to see a bunch of people buy this even if they aren't camera or photography enthusiasts, just because they like the latest and greatest," said Ben Bajarin, chief executive and principal analyst of Creative Strategies. "That by itself creates that buzz and momentum and allure to the top end."

Apple is expected to increase the average price per phone sold to boost its revenue, but the question is whether it does that by raising prices across the board or just on premium versions. The global smartphone market has slumped from shipping 294.5 million total phones to 268 million in the second quarter, but Apple's shipments declined the least of any major smartphone maker, dropping from 46.5 million phones to 45.3 million, according to data from Counterpoint Research.

"The truth of the matter is, we're in a very down smartphone market," said Bob O'Donnell, head of TECHnalysis Research.

O'Donnell said he will also be on the lookout for any hints about Apple's plans with what is known as generative artificial intelligence, the technology trend behind applications like OpenAI's ChatGPT and Microsoft's "Copilot" assistant technologies for its Office software.

Analysts have repeatedly prodded Apple about its plans for such technology but the company has given few hints so far, other than Chief Executive Tim Cook's comments in July that the company's secret work on the technology is driving up its research spending.

"Will Apple tease an advanced form of Siri? That would be something that would generate some excitement," O'Donnell said.

Exclusive: Japan elevates Taiwan security ties in move likely to rile China

https://reuters.com/article/taiwan-japan-defence/exclusive-japan-elevates-taiwan-security-ties-in-move-likely-to-rile-china-idUSKBN30I0PU

Japan has appointed a serving government official to act as its de facto defence attache in Taiwan, four sources said, elevating security ties in a move likely to anger China, which claims the strategic, democratic island as its own.

Japan does not have any formal diplomatic representation in Taiwan, and instead handles bilateral relations through the Japan-Taiwan Exchange Association in Taipei, which is chiefly staffed by reassigned foreign and trade ministry officials. The defence attache role, however, has until now been held by a retired Japan Self Defence Force officer to avoid antagonising China.

He has been joined by an official dispatched by the defence ministry to enhance information gathering and communicate with Taiwan's military, said the sources, who asked not to be identified because of the sensitivity of the issue.

It is also "symbolic" of Japan's support for Taiwan, said one of the people who know about the appointment. "Taiwan had been asking for an active duty defence official to fill the post," he added.

Highlighting Tokyo's nervousness about Beijing's reaction, the move was halted last year after a Japanese media report about the plan, the sources said.

Japan's defence ministry said that it would only pursue "non-governmental" ties to Taiwan, a Japanese colony from 1895-1945, that were within the bounds of a 1972 joint statement that recognised Beijing as the sole legitimate government of China.

Taiwan's Ministry of Foreign Affairs declined to comment when asked about the new defence attache but said it "will continue to deepen cooperation with similar-minded partners such as Japan".

Beijing's expanding military presence around the island, which is only 100 km (62 miles) from Japanese territory, has unsettled Tokyo. It worries about becoming embroiled in any conflict that could also threaten nearby sea lanes that supply Japan with most of its oil.

On Monday, Taiwan said a Chinese naval formation led by the aircraft carrier Shandong passed 60 nautical miles from its coast on its way to the western Pacific.

Concern about such manoeuvres is spurring calls for Japan to forge security links with Taiwan, including direct military-to-military contact that could help Japan plan for a contingency.

Yet Beijing could see any upgrade of ties as an attempt to interfere in its internal affairs.

In August last year, China responded to a visit to Taiwan by then U.S. House of Representatives Speaker Nancy Pelosi with military exercises that included missile strikes in waters close to Japanese islands.

Four months later, Japanese Prime Minister Fumio Kishida's administration unveiled Japan's biggest military buildup since World War Two, with a doubling of defence spending over five years to pay for longer-range strike missiles, the development of an advanced fighter jet, and stockpiles of munitions and spare parts that it would need in a sustained conflict.

In an accompanying national security assessment, his government said peace in the Taiwan Strait was essential for international stability.

China has criticised Japan, the U.S. and other Western nations for adopting what it calls a Cold War mentality.

So far, no senior Japanese government official has visited Taiwan, but several lawmakers have gone there in recent months in a broadening of unofficial travel meant to show support for the island.

That lawmaker diplomacy included a visit by Aso Taro, a former prime minister and vice president of the ruling Liberal Democratic Party, last month when he met Taiwan President Tsai Ing-wen.

At a forum there, Aso said Japan needed to show "resolve to fight" for Taiwan. Beijing said the remark was harmful to "the political foundation of China-Japan relations".

China publishes backstory of US “spy“ jailed for life

https://reuters.com/article/china-usa-spying/china-publishes-backstory-of-us-spy-jailed-for-life-idUSKBN30I0HD

China's top spy agency published new details this week about a U.S. citizen jailed for life for espionage earlier this year, describing his recruitment by U.S. agents, how they fabricated his legend, and how he helped them entrap surveillance targets.

When a court in Eastern China jailed 78-year-old John Shing-wan Leung to life in May it ended his more than three decade long career as an "American spy", the Ministry of State Security wrote in a statement on its official WeChat account on Monday titled "Prominent American Spy Captured in China!".

Born in Hong Kong Leung went to the United States in 1983 to run a restaurant, before being "formally" recruited as an informant by an unnamed U.S. spy agency in 1989 and in the same year became a U.S. citizen, the ministry's statement said.

Leung was promised $1,000 a month as well as bonuses for intelligence and a false "persona" was created to polish his "social image" to help him get close to Chinese institutions and individuals in the United States, the ministry said.

This false legend included attending university in the United Kingdom, holding a position in the United Nations and serving in the Vietnam war. The ministry said Leung was also instructed to make donations to charities and U.S. state legislators "to raise his profile".

Using this cover, the ministry said, Leung attended meals and festivals and helped organise immigrant group activities to gather intelligence on Chinese nationals and overseas Chinese in the United States.

He also brought targeted people to restaurants and hotels where surveillance devices were installed with the aim of extracting information they spilled or entrapping them.

According to the security ministry, Leung was directed to go to China by his U.S. handlers in 2020, when the pandemic restrictions made entry to the country difficult. Aged 75, Leung "used multiple identity documents to transit through Hong Kong and arrived in mainland China" in late that year, it said.

"Under the guidance of several American spies, Liang Chengyun collected a significant amount of intelligence related to China," the statement said, using his Chinese name, adding that he was given a "Meritorious Service Medal" by U.S. intelligence agencies.

The U.S. embassy in Beijing did not immediately reply to a request for comment.

The Chinese ministry did not explain in the post why it chose to share details months after Leung's conviction, but it has been conducting a national security publicity campaign with a stated aim of rooting out foreign spies and its official WeChat account only went live in August.

The release of the ministry's report on Leung coincided with a media storm in the UK after The Times of London published details about the arrest of a British parliamentary researcher suspected of spying for China.

In August, China separately released details of two investigations into Chinese nationals accused of spying for the U.S. Central Intelligence Agency (CIA).

In its statement on Leung, the security ministry warned that anyone who joins an espionage organization or accepts jobs via agents should be sentenced to at least 10 years to life in prison.

The foreign business and diplomatic community in China has become more guarded following the expansion of Beijing's anti-spying law earlier this year.

Asian stocks steady, Japan, China central banks interrupt dollar“s ascent

https://reuters.com/article/global-markets/asian-stocks-steady-japan-china-central-banks-interrupt-dollars-ascent-idUSKBN30I01J

Asian stock markets edged up on Tuesday while comments from central banks in China and Japan interrupted the dollar's ascent, giving traders a breather ahead of U.S. inflation data that could influence when or if the Federal Reserve raises rates further.

The yen notched its best day against the dollar in two months overnight, after Bank of Japan Governor Kazuo Ueda said policymakers might have enough economic information by the year-end to determine that short-term rates will need to rise.

The yuan had its best day in six months after authorities vowed to correct one-way moves and Reuters reported the central bank had stepped up scrutiny of dollar buying.

Both, however, remain near their weakest levels of the year and with the yuan at 7.3016 per dollar in offshore trade and the yen was last at 146.68 per dollar, a little weaker than its best level on Monday.

Japanese government bonds remained under pressure on Tuesday, with 10-year JGB yields up 1 basis point to a fresh high of 0.71%.

"The result of Ueda's comments was an intense move higher in Japanese swaps and government bond yields," said Chris Weston, head of research at brokerage Pepperstone in Melbourne.

"(It) is certainly constructive for yen longs. (But) I refrain from getting too excited at this stage...where the actions are more of a medium-term issue - we won't get the outcome of the spring wage negotiations until April 2024."

Investors in China drew some comfort from news that the country's largest private property developer Country Garden (2007.HK) has won approval from creditors to extend repayments on six onshore bonds by three years.

That lifted Hong Kong's Hang Seng Mainland Properties Index (.HSMPI) as much as 1.5%, reversing an earlier drop of more than 2%.

"This is likely just another case of kicking the can down the road, but it seems to have slowed the bleeding on the property index at least," said Matt Simpson, senior market analyst at City Index.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) gained 0.12%. Japan's Nikkei (.N225) rose 0.61%, with markets looking to U.S. inflation data and this week's European Central Bank meeting to set interest rate expectations and the mood.

Due on Wednesday, markets are expecting the U.S. figures to show annualised core inflation falling to 4.3% in August though the headline number is seen ticking up to 3.6%.

"A lower-than-expected print may slow the U.S. dollar's rise while higher print could potentially un-nerve risk sentiments as it would reinforce market expectations for further rate hikes, and this could fuel dollar strength," said OCBC strategist Christopher Wong.

Interest-rate futures markets are pricing about a 45% chance of another U.S. rate hike by year's end.

Investors' appetite for risk is also to be tested this week when British chip designer Arm Holdings lists in New York with a goal of raising almost $5 billion.

Overnight, the weaker dollar and upgrade on Tesla from analysts at Morgan Stanley helped U.S. stock markets gain. Tesla (TSLA.O) rose 10%. The S&P 500 (.SPX) rose 0.7%.

In early Asia trade, U.S. futures slipped 0.11%.

Elsewhere in currency markets, the Australian dollar was weighed by a further slip in consumer sentiment, which has been below the neutral 100 mark since March 2022 - the longest streak since a recession in the early 1990s.

The Aussie , which bounced on Monday with gains in the yuan, was last 0.04% higher at $0.6433. The New Zealand dollar meanwhile dipped 0.3% to $0.5918.

The euro notched a one-week high against the dollar, though moves have been muted with investors dialling back long euro positions ahead of Thursday's ECB meeting. Pricing implies about a 56% chance that policymakers leave rates on hold.

"There is a sense that ECB is already done for the cycle," said Maybank analysts in a note to clients.

"Recent PMI prints suggest that growth outlook could be deteriorating and puts the euro at risk of further downside. This is all the more amplified by lingering expectations for the Fed to hike further."

Benchmark 10-year Treasury yields were steady at 4.2940%.

In commodity markets, Brent crude futures were steady at $90.96 a barrel. Gold hung on at $1,922 an ounce, while bitcoin was out of favour and dropped below $25,000 for the first time in three months on Monday.

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Chinese state media censors itself after highlighting poem about corrupt leaders

https://www.theguardian.com/world/2023/sep/12/chinese-state-media-censors-itself-poem-corruption-hangzhou

Chinese state media appears to have censored one of its own videos after viewers notice it featured a classic Chinese poem about corrupt and indulgent leaders ignoring national crises.

The video, produced by official state media outlet, the People’s Daily, aimed to promote the city of Hangzhou, which is hosting the Asian Games this month, by showcasing literary links to the city. However one featured poem by Lin Sheng raised some eyebrows.

Written in the 12th century, it is interpreted as a criticism of the Song Dynasty rulers, accusing corrupt officials of fleeing troubled lands to Hangzhou, and ignoring the struggles and crises of regular people while they drunkenly enjoy their own lives.

The poem itself is widely known and not censored, but commenters noted its inclusion suggested the video producers hadn’t realised the descriptions of people partying in Hangzhou was political satire.

The People’s Daily video also included another poem which has been used by some activists who draw on its references to “June” and “four seasons” to get around censorship of the Tiananmen Square massacre on 4 June 1989, the China Digital Times reported.

The video containing both poems was quickly taken down, but not before it was viewed at least 130,000 times across the People’s Daily and another state media account, according to censorship monitoring site, Free Weibo. Several other accounts also shared the video. A hashtag promoted alongside it no longer returns any results.

“If this kind of mistake was committed by a political dissident or even an ordinary netizen, they would be targeted by angered nationalists, cyberbullied, and sent death threats in real life,” one commenter on the video posted to People’s Daily Weibo account said.

“This seriously hurts my national sentiments,” joked another, referring to a recent draft law which would criminalise comments, clothing, or symbols which “undermine the spirit” or “harm the feelings” of China.

The draft law drew unusually frank concern from citizens and academics, some but not all of which was subsequently censored.

Political commentary in China is strictly controlled, with criticism frequently censored or drawing more serious consequences. Under the leadership of Xi Jinping, the rule of the CCP has grown increasingly authoritarian, with crackdowns on activists, dissidents, and criticism.

There have also been other signs of growing dissatisfaction, including unrest over how authorities handled recent deadly flooding in regional areas, and last year’s extraordinary “white paper” protests against censorship. China’s economy is also struggling with record high levels of youth unemployment, which stopped being reported after the government ceased publishing the figures last month.

Additional research by Tau Yang

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Dozens of escaped crocodiles lurking in floodwaters, Chinese city warns

https://www.washingtonpost.com/world/2023/09/12/china-crocodile-escape-guangdong/2023-09-12T03:43:56.578Z

The southern Chinese city of Maoming has urged residents to stay away from bodies of water as it struggles to locate and capture dozens of crocodiles that fled a farm during weekend flooding.

The Siamese crocodiles, including 69 adults and 6 babies, were confirmed to be missing after about four months worth of rain pelted the subtropical city on Saturday and Sunday. Parts of Maoming, in Guangdong province, were submerged in up to 3.3 feet of floodwater from back-to-back typhoons.

Authorities are “trying to keep things under control, but the number of escaped crocodiles is a bit too many,” state-run Dazhong Daily cited the district emergency management bureau in saying.

‘Monster’ fish eludes capture as Chinese city drains lake, millions watch

Residents in the city’s southern Maonan district, a major freshwater aquaculture base that housed the crocodile farm, have been told to stay vigilant and avoid going out, especially keeping away from rivers, lakes and reservoirs, the newspaper reported.

Videos posted to Douyin, TikTok’s Chinese platform, apparently showed crocodiles popping up their heads on a flooded road around a lake in Maoming.

An officer with the city’s emergency response department, who spoke on the condition of anonymity because he was not authorized to comment before an official statement is released, said more than a dozen of the escaped crocodiles have been found, but “there could still be over 50 out there.”

Police, firefighters and emergency responders with underwater sonar equipment have been mobilized for the search, and multiple teams are patrolling on motorboats, yet “we are not quite sure where they are,” the officer said, adding that there were no casualty reports as of Tuesday morning.

Paramilitary forces stationed in the area have received orders to shoot dead any crocodile that emerges from the deep-water zone, Southern Metropolis Daily reported, which also cited villagers who visited the farm in saying the smallest adult crocodiles there weigh at least 220 pounds. Warning signs have been set up around the perimeter of the inundated farms and cropland, the newspaper reported.

Maoming and the broader Guangdong province have been battered by two typhoons in two weeks, with Saola and Haikui wreaking havoc across Taiwan and southern China. Landslides caused by extreme downpours Sunday and Monday have killed at least seven people in the neighboring Guangxi region, state media reported Tuesday. Hong Kong’s streets turned to rivers last week, as a quarter of all the rainfall expected for a year fell in 24 hours.

Maoming has some of the country’s largest crocodile farms, with crocodile skin manufacturing facilities in nearby cities. Crocodile meat is also a local delicacy.

The farming and trade of live crocodiles is allowed under Chinese law, and cases of farmed reptiles running loose are not uncommon in the country. In 2013, crocodiles reportedly escaped from a farm in the same city after the barbed wire around the farm got rusty and flimsy because of prolonged flooding. Two months later, several dozen crocodiles got out of their farm enclosure in Shantou city after flooding. And in 2022, a farmer in Yibin, in southwestern Sichuan province, reported that six of his farmed crocodiles went missing, prompting the city to issue a warning to swimmers.

[Blogs] Newspaper headlines: 'I'm no China spy' and '1 in 3 female surgeons abused'

https://www.bbc.co.uk/news/blogs-the-papers-66781943?at_medium=RSS&at_campaign=KARANGA

China economic woes could raise Taiwan risks, says US House committee chair

https://reuters.com/article/usa-china-congress-taiwan/china-economic-woes-could-raise-taiwan-risks-says-us-house-committee-chair-idUSKBN30H1PS

WASHINGTON (Reuters) - China’s economic slowdown could increase the risk of Beijing taking military action toward Taiwan, the Republican chair of a U.S. congressional committee on China said on Monday, drawing a contrast with Democratic President Joe Biden, who said it made it less likely.

Biden on Sunday called China’s economic troubles a “crisis,” and said on a trip to Asia that he did not think it would cause China to invade Taiwan, noting instead that he felt Beijing probably did not have the “same capacity” it previously did.

“I don’t know if that’s true,” Mike Gallagher, chair of the U.S. House of Representatives’ select committee on competition with China, told a Council on Foreign Relations event in New York.

“I just think it’s equally as plausible that, as China confronts serious economic and demographic issues, Xi Jinping could get more risk accepting, and could get less predictable and do something very stupid,” Gallagher said, referring to the Chinese president.

The congressman added that this alternate scenario was not meant as a criticism of the Biden administration.

China’s military in recent years has stepped up activity around Taiwan, which Beijing claims as its territory. U.S. Central Intelligence Agency Director William Burns has said Xi has instructed his country’s armed forces to be ready to invade by 2027, though that does not mean he would order it.

Gallagher said he was visiting New York partly to work with financial industry experts to assess the risk to the global financial system if China were to invade or blockade Taiwan.

A source close to the committee said senior executives from major investment banks, current and former executives from the pharmaceutical and critical minerals and mining industries, as well as retired four-star military officers would participate in a war game later on Tuesday.

“I think our best chance at deterrence is robust and smart investment in hard power,” said Gallagher, who has repeatedly called for the U.S. to ramp up arms provisions to the island, and to ban U.S. capital flows into Chinese-military linked companies.

Fears of an economic slowdown have gripped China, and Xi skipped the G20 summit this past weekend.

U.S. officials have said Beijing has the resources to deal with its economy short-term but must face longer-term structural economic issues such as demographics and high debt.

MPs furious over being kept in dark about alleged spying for China

https://www.theguardian.com/uk-news/2023/sep/11/mps-furious-over-being-kept-in-dark-about-alleged-spying-for-china

MPs have vented their fury over a six-month silence that followed an aide operating at the heart of parliament being arrested on suspicion of allegedly spying for China and accused of passing information to Beijing in breach of the Official Secrets Act.

They voiced concern on Monday that the gap meant they had been unable to take their own security precautions, amid wider concern that individual pro-democracy activists could be put at risk by any security lapse.

Kirsty Blackman, an SNP frontbencher, asked why parliament only learned about the allegations from media reports over the weekend, and called for “a review into the decision-making process” as soon as possible.

Tim Loughton, a Conservative MP who has been previously sanctioned by China for criticising the country’s regime, said no guidance had been provided to MPs by parliament’s security authorities or by the Foreign Office or Home Office.

Responding directly to Blackman, Lindsay Hoyle, the Commons speaker, said “the MPs who needed to be told were told” at the time of the arrest, which had quietly taken place in March.

Investigators needed time to complete their inquiries, Hoyle added, describing the episode as “a major security issue”.

The researcher, who is in his 20s, was arrested in Edinburgh at the same time as a second person, in their 30s. It is understood he had links to Tory MP Tom Tugendhat, until he became security minister, and subsequently Alicia Kearns, who chairs the foreign affairs select committee.

Only a small number of MPs appear to have been warned, with other members of the cross-party foreign affairs select committee saying they had not been told about the arrest at the time.

Police sources also confirmed to the Guardian that there had been no public report of the arrests at the time they were made.

A handful of senior ministers were aware of the situation, however. Rishi Sunak, the prime minister, told parliament that James Cleverly, the foreign secretary, had raised the matter in private with his counterparts when he visited China at the end of August.

“I’m limited in what I can say specifically, but I’ve been emphatically clear in our engagement with China that we will not accept any interference in our democracy and parliamentary system,” Sunak said.

He added: “I can absolutely confirm that the foreign secretary raised these issues on his recent visit.”

Parliament’s security team is understood to have been “actively involved from the beginning” in the investigation, according to a senior parliamentary source. They said that the authorities worked with the security services to identify the parliamentary researcher who was arrested.

The researcher is not being named by the Guardian for legal reasons and on Monday, without identifying himself, he released a statement denying that he was a spy.

“It is vital that it is known that I am completely innocent,” he said in remarks released by his lawyers.

“I have spent my career to date trying to educate others about the challenge and threats presented by the Chinese Communist party. To do what has been claimed against me in extravagant news reporting would be against everything I stand for.”

The two men remain on police bail until an unspecified date in early October, while investigators continue to examine the case, which has prompted increased concerns about Beijing’s willingness to spy on the UK.

The parliamentary researcher arrested has no family ties to China. Security sources said on Monday that they believed the alleged spying could represent a potential escalation by Beijing of its espionage activities.

“If this is proved to have happened once, it is not likely to be an isolated incident,” one former senior intelligence official said.

China has accused Britain of engaging in “nothing but malicious slander” in its response to the news of the arrests. A spokesperson for the Chinese embassy in the UK complained of “anti-China political manipulation” and urged the British leaders to “stop putting on such self-staged political farce”.

Luke de Pulford, the executive director of the Inter Parliamentary Alliance on China, an international group of MPs and legislators monitoring human rights in the country, said those who knew the arrested researcher had not had a chance to reflect on the impact on any China-related cases they dealt with.

“This guy was arrested in March, so people around them don’t know what their potential exposure to risk is. That includes MPs who dealt with asylum requests or visa requests for people like those from Hong Kong, dissidents and others.

“But we are also talking about people whose families are back home in China, but who are working here, and are doing work that would open them up to accusations on the part of the CCP of working with foreign forces, for which they could face long periods of imprisonment,” he said.

Mark Sabah, UK and EU director of the Committee for Freedom in Hong Kong Foundation, said he feared that pro-democracy activists who shared personal information with British MPs could be at risk if any information had leaked to Beijing.

“The big issue here, though, is that it’s not the MPs who suffer most from this, whether it’s embarrassment, or the security or parliamentary screening team,” he said.

“It’s actually the people who make approaches to lobby for causes like Tibet, Hong Kong and others who have genuine threats from the Chinese Communist party and who are in need of genuine and safe channels they can use to advocate and feed information into the debate.”