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How exit bans are harming China’s push to welcome foreign business
My latest column first published on South China Morning Post on Monday
China’s leaders have rolled out the red carpet for prominent overseas executives and repeatedly reassured them that the country is open for business since December, when Beijing lifted tight Covid-19 restrictions which closed the world’s second-largest economy for almost three years. The latest example is that the state media has given rock-star treatment to the visit by Tesla CEO Elon Musk.
The news coverage of their visits will no doubt encourage other entrepreneurs and investors to resume travel to the mainland as they try to make sense of the country’s politically charged investment climate amid rising tensions between China and the United States.
But, in conversation with Hong Kong-based executives in the past few months, I found some have begun to voice misgivings about something which would have sounded absurd even a few years ago: is it safe to travel to the mainland, and will they be barred from leaving the country?
The ominous-sounding Chinese phrase bian kong, or exit bans, now often enters the table talk among the executives, particularly after some wine loosens their tongues. The phrase refers to a policy tool increasingly being used by the authorities to prevent people from leaving the country amid suspicions or accusations of wrongdoing or simply because they are on the wrong side of a business dispute or work for the wrong people.
As I dug deeper into the issue, almost all executives I spoke to have had a story to tell on exit bans, either about their own unpleasant experiences or their business friends being banned from leaving.
Here is a true story that will put the implications of exit bans into context as it shows that the policy is arbitrarily applied and violates international laws and human rights. Moreover, it has also become a sticking point in talks between Beijing and Washington as several US passport holders, along with other foreign executives, have been ensnared by exit bans.
The story involves a business contact whom I will call Mr X to protect his identity and safety. Mr X was a senior executive who worked for one of the many companies in Beijing ultimately controlled by Duan Weihong, the billionaire known for her intimate business links with the close relatives of former Chinese premier Wen Jiabao.
Mr X realised something was seriously wrong in October 2017 when he tried to fly to Canada to visit his family but was stopped by border police at Beijing Capital International Airport. They told him he was implicated in economic crimes and was not allowed to leave, but they refused to produce any documents or give further details.
It quickly dawned on him that the refusal to allow him to leave might have something to do with rumours that Duan had been secretly detained on corruption charges even though he left her company six years earlier.
In the ensuing days, his frantic calls to former colleagues and other business associates who also worked for Duan revealed at least a dozen of them had similar experiences of being turned away at checkpoints in airports or ferry terminals to Hong Kong.
Mr X ended up being stranded in Beijing for more than five years until January this year, during which time he remained separated from his wife and son and missed important family events. While he was free to go anywhere within the mainland, the psychological pressure took a toll on his mental and physical health.
Authorities did not contact him once in more than five years of being stranded. He had no avenues to appeal against the exit ban as he had no idea who had imposed the ban or why. His subsequent two attempts to leave the country in the intervening years were similarly refused.
Only at the beginning of this year did his hope rise when there was speculation that Duan had been released on bail. Trying his luck again, he booked a flight to Hong Kong and breezed through the border checkpoint at the Beijing airport.
Mr X’s traumatic experience fits into a pattern in recent years that, once a business figure is detained on suspicion of wrongdoing, almost all of that person’s family members, senior colleagues and business partners will face exit bans. They will be barred from leaving the country for months or even years until that person is released or formally convicted.
Nationwide, the scale of exit bans has recently come to light in a detailed analysis by the rights group Safeguard Defenders. It estimates at least “tens of thousands” of people are banned from leaving the country at any one time. While most of those are Chinese citizens, the travel ban has affected a rising number of overseas nationals and those from Hong Kong and Taiwan.
According to the report, there are at least 14 laws and scores of regulations, legal interpretations and documents that cover exit bans in mainland China today. Moreover, China’s new counter-espionage law, which will take effect next month, allows exit bans to be imposed on anyone under investigation.
According to my investigation, in a few exceptional cases, some businesspeople facing a travel ban can find themselves in a quandary for an indefinite period because the task forces formed to investigate those people were disbanded before exit bans had been lifted.
That explains why some overseas investors and businessmen are increasingly worried. While deals can go sour while conducting normal business, disputes should be settled properly and transparently. Arbitrary and expansive application of exit bans will only harm China at a time when the leadership is pushing to show it is open to overseas business.
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