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Many of them can't just extricate themselves from the Chinese market before these changes hit. They will take huge losses if they disrupt communications or restrict access to trade secrets.

My guess is that many will try to ignore that law and just assume that the government isn't looking or that it is bound by local law not to give trade secrets to competitors and so on. Of course that's not worth a lot, but ...

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If I was an employee or customer of a US/EU company that has a large percentage of (e.g., engineering) staff based in China, I'd be seriously concerned at this point. Large multinationals may be able to avoid/mitigate the restrictions somehow. But smaller companies that depend on a Chinese branch would surely try to "fly under the radar" and stick it out in the hopes of the law not being applied to the fullest extent.

From the sound of it, such small companies would not even know if the law was being applied or not. If the government needs the information, it will take it. It will not be necessary to ask permission, or even inform the affected company that such access took place.

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