China's arrest of Japanese man could unsettle foreign firms even more

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According to officials from the Japanese Ministry of Foreign Affairs and Embassy in Beijing, China has officially arrested a Japaneseman who was detained back in March.

The arrest of a Japanese national who was reported to be an employee of a Tokyo based pharmaceutical company could further rattle the foreign business community in China. They have already expressed their concern about the crackdown on international consulting firms for national security reasons.

At a Thursday press conference, Japanese Chief Cabinet Secretary Hirokazu Mattsuno stated that the Japanese man in question was arrested mid-October.

According to the Japanese public broadcaster NHK the man worked for the drugmaker Astellas Pharma. He was arrested in March in Beijing by Chinese security officials on suspicion of violating China's anti-espionage and criminal laws. It said that he has lived in China for about 20 years.

CNN was unable to independently verify the information.

The MOFA of Japan has not named the man or released any information on his employer, charges brought against him, or where he's being held. The ministry refused to provide more information to CNN.

A spokesperson for Astellas told CNN that they were awaiting more information from MOFA, and could not make a statement.

Mao Ning, a spokesperson for the Chinese Foreign Ministry, said that when asked about the arrest made of an Astella executive from Japan on Thursday, the Japanese national 'was suspected by Chinese authorities of espionage' and had been subjected to criminal mandatory measures.

Analysts warned that China's already comprehensive counter-espionage laws could be further weakened by the recent expansion of its scope.

The Ministry of State Security then took the unprecedented move of opening a public WeChat account, China's most popular social messaging application, which boasts over 1 billion users. Since then, the Ministry of State Security has repeatedly used WeChat to urge the public not to be complacent and to report any suspicious activity.

Investors and foreign companies are increasingly wary about the rising risks in the second-largest economy, which include the possibility of detentions and raids.

China fined the Mintz Group in July for allegedly performing unapproved statistics work within its borders. In March, officials closed the group's Beijing offices and detained its five local employees.

State security authorities announced in May that they raided several offices of Capvision. The announcement came a month after policequestionedemployees at the Shanghai office of consultancy Bain.

This issue is a headache for some foreign companies, who were having difficulty convincing their workers to move to China.

In a white paper this year, the American Chamber of Commerce in China reported that 51% of its members who participated in an annual survey said their top candidates for expatriates were unwilling to move into the country. This is up by 21% compared to last year.

According to the Chinese Commerce Ministry, in the first eight-month period of this year foreign direct investment into China decreased by 5.1% compared to a year earlier.

According to the State Administration of Foreign Exchange's August report, Direct Investment Liabilities, a measure of FDI reflected on a country’s balance of payment, dropped to $4.9 billion from April to June. This was the lowest quarter-by-quarter amount since records began.

This report was contributed by CNN's Michelle Toh in Hong Kong, Sophie Jeong in Beijing and Mengchen Zhu in Beijing.