Belgium’s primary intelligence agency has turned its focus to Alibaba Group Holding Ltd (NYSE:BABA) main European logistics hub. The increased surveillance follows rising concerns of potential espionage, with suspicions that China may be using its escalating economic influence in the West for spying activities.

What Happened: A recent report by the Financial Times reveals that the Belgian State Security Service (VSSE) is keeping a close watch on Alibaba’s logistic center located at Liège’s cargo airport. This move is aimed at detecting possible espionage or manipulative activities by Chinese entities, including Alibaba.

Alibaba  signed an agreement with Belgium in 2018 to establish the Liège hub, injecting €100 million (approx $105 million) into the country's economy. Despite this, VSSE has continued its surveillance of Alibaba’s operations based on intelligence evaluations, as stated by sources acquainted with the matter.

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The VSSE is particularly concerned about the implementation of software systems that collect sensitive economic information. It fears that Alibaba’s presence could be problematic due to Chinese legislation that mandates companies to share their data with Chinese authorities. The agency has expressed that “China has the intent and capacity to use this data for non-commercial purposes.”

Alibaba and Cainiao, its logistics subsidiary that operates the Liège center, have refuted any allegations of misconduct. The firms maintain that they adhere to all laws and regulations, including the EU’s data protection rule.

Initially, Belgian authorities were optimistic that Alibaba’s presence would help reduce the trade deficit with China and boost the economy. However, data from the National Bank of Belgium showed that the country’s trade deficit widened from €3.7 billion in 2021 to €9.1 billion in 2022.

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