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2 days ago
- Business
- First Post
As China exit ban shakes Western firms, an opportunity for India
Recent events have deepened the concerns of multinational firms operating in China. The practice of issuing exit bans, particularly for those with family ties in China or involved in commercial disputes, has been used as a tool by Chinese authorities for years. However, the latest incidents have elevated the risks to a new level particularly for foreign nationals travelling on business. Reports said two US citizens including a federal employee and a senior executive at Wells Fargo have been barred from leaving China. These cases are not isolated. Dozens of American citizens, many of them ethnic Chinese, are under similar exit bans in China, often with little transparency or legal recourse. STORY CONTINUES BELOW THIS AD John Kamm of the Dui Hua Foundation told The Washington Post that the number of such bans may be as high as 50, with new cases emerging monthly, typically tied to commercial or civil disputes. The Wells Fargo Incident: A turning point The case of Chenyue Mao, a managing director at Wells Fargo specialising in international factoring, has become emblematic of the growing tension. Mao, a US citizen born in Shanghai, entered China recently on a business trip and discovered upon attempting to leave that she was subject to an exit ban. Wells Fargo promptly suspended all employee travel to China and confirmed it was actively working through appropriate channels to secure Mao's return to the US, reports said. Mao's extensive professional history in global trade finance, including leadership roles in international financial organisations, highlights the potential diplomatic fallout. Her travel restriction, imposed without clear explanation, raises serious concerns about the predictability and safety of conducting business in China. Corporate fallout and diplomatic repercussions Multinational corporations, especially those with staff deployed in mainland China, are now reevaluating risk exposure. Some companies have already issued internal directives discouraging solo travel or advising employees to avoid China altogether, Reuters reported. The broader implication, however, is that firms are beginning to question whether operating in China is worth the geopolitical and personal risk. US government agencies have responded cautiously but firmly. The State Department reiterated its advisory urging Americans to reconsider travel to China due to arbitrary enforcement of local laws, including exit bans. Furthermore, senior diplomats have raised these cases directly with Chinese officials, with pressure mounting at high levels to ensure the affected individuals are allowed to return home. Mixed signals from Beijing China has long courted foreign investment, emphasising its openness to global business. Spokespersons from the Chinese Embassy in Washington have reiterated that China 'guarantees the safety and legitimate rights' of foreign citizens within its borders, provided they respect local laws. But China's growing use of exit bans, lack of judicial transparency and disregard for dual nationality protections run contrary to these assurances. A wake-up call for Western corporations The events surrounding Mao's detainment have triggered a reckoning among global business leaders. Veteran bankers and corporate executives who previously experienced China's regulatory environment with relative confidence now face a stark reality that no foreign passport offers guaranteed protection. For ethnic Chinese professionals, the risk is compounded by Beijing's refusal to acknowledge dual citizenship. In the words of a former US official, naturalised citizens are particularly vulnerable. The Chinese government views them as Chinese nationals first, giving the state leverage through family connections still in the country. Cases like that of a US government employee reportedly held in China for visa-related issues reinforce these concerns, especially as the person involved was travelling for personal reasons and not on official business. Eroding business confidence The chilling effect on global business sentiment is growing. The use of exit bans, especially against senior executives, threatens not only individual liberties but also the operational flexibility of multinational firms. As reported by The Economic Times, Mao's case has generated considerable alarm, especially in sectors reliant on frequent cross-border engagement such as finance, tech and manufacturing. China's ambition to remain a global business hub now faces a self-imposed challenge. Detaining business travellers, whether as part of internal investigations or diplomatic leverage, sends a contradictory message. While the country's leadership continues to court global investors, its practices increasingly alienate the very professionals it seeks to attract. STORY CONTINUES BELOW THIS AD India: A stable and strategic alternative Amid this growing disquiet, attention is turning toward India as a more secure and strategically viable destination for Western companies. The appeal is rooted not just in India's demographic advantages or its burgeoning middle class, but in its political and legal transparency, favourable investment climate and robust institutional framework. Over the past few years, India has actively positioned itself as an alternative manufacturing and technology hub through initiatives such as Make in India and production-linked incentive (PLI) schemes. Western multinationals have already begun shifting parts of their supply chains to India, often citing regulatory stability and democratic governance as key factors. The timing could not be more opportune. While China's opaque legal environment deters inbound travel and long-term planning, India offers relative predictability. The recent instability in US-China relations only sharpens this contrast. Business leaders are increasingly factoring in not just cost efficiency but also geopolitical resilience when selecting regional bases. Building trust through rule of law Unlike China, India maintains an independent judiciary and relatively open media ecosystem, both of which contribute to a safer environment for foreign investors and professionals. Arbitrary detentions, opaque travel restrictions and politically motivated legal actions, which are key concerns in China, are far less common in India. This legal clarity provides assurance to international firms that their rights and those of their employees will be upheld. Furthermore, India's diplomatic relations with Western nations have been steadily improving. Strategic partnerships with the US, EU, Japan and Australia bolster its credibility as a long-term business ally. These alliances also create a security buffer that helps insulate foreign investors from the volatility seen in other emerging markets. In practical terms, firms looking to de-risk their Asia strategies are already exploring options to relocate regional offices or data centres from China to India. The software and electronics industries are leading the charge, but the trend is expanding into pharmaceuticals, textiles and financial services. STORY CONTINUES BELOW THIS AD Companies previously hesitant to exit China entirely are now taking a 'China-plus-one' approach retaining minimal presence in China while building up operations elsewhere. India, with its skilled workforce, improving infrastructure and investor-friendly reforms is increasingly emerging as that 'plus-one.' Several multinationals are quietly moving critical roles out of China. Apple, for instance, has increased its iPhone production capacity in India. Likewise, Google and Microsoft have expanded their development centres across Bengaluru and Hyderabad. These aren't merely tactical decisions. They reflect a growing strategic consensus that long-term exposure to China carries reputational and operational risks that are no longer acceptable. The Wells Fargo episode, for all its uniqueness, has only intensified these conversations. Corporations now see India not just as a promising growth market, but as a secure geopolitical partner. A shift in the balance of power The detainment of American nationals in China, particularly high-ranking business professionals, has introduced a new layer of risk into an already complex geopolitical arena. While Beijing attempts to walk a fine line between regulatory control and economic openness, it risks alienating the very investors and professionals critical to its growth ambitions. In contrast, India offers a path forward for Western firms looking for stability, transparency and a reliable rule of law. As corporate leaders reexamine where and how they operate in Asia, the choice between risk and resilience is becoming clearer. And for many, India is emerging not just as an alternative, but as the new centre of gravity in the region's economic future. STORY CONTINUES BELOW THIS AD
New York Times
30-04-2025
- Politics
- New York Times
A U.S. Businessman Is Sentenced to 5 Years in Prison in China
A Chinese-born American businessman was sentenced last week to five years in prison in China, on charges related to a criminal case nearly 25 years ago, despite having frequently made routine trips in and out of the country after the fact. The businessman's family, as well as a longtime human rights activist, say the case is an example of the arbitrary nature of law enforcement in China. They have urged the Chinese government to release the businessman, David Lee, on humanitarian parole, noting that he had been hospitalized for 10 days and that they believed he had suffered a stroke. Mr. Lee's sentencing on April 23 came as tensions between the United States and China were at their highest point in years, inflamed by President Trump's tariffs. There were no signs that the case was related to the tensions, but it could add another source of friction to the relationship. Mr. Lee was found guilty of intentional injury and 'picking quarrels and provoking trouble,' a vague charge that China often uses against people it perceives as a threat to social stability. In the written verdict, the judge said that Mr. Lee, 61, had been involved in three altercations in 2000 and 2001, one of which led to a man's death. But the family of Mr. Lee, who held a green card at the time and became an American citizen in 2002, said his role in those incidents was minor. He was briefly detained then released without charges, and he assumed the case was closed, his wife, Louise Lin, said. Over the next two decades, he traveled to China nearly every month for his work as a wholesale lighting supplier for Home Depot. Mr. Lee sometimes spent months at a time in China with no issue, Ms. Lin said. 'If you know you're in trouble, of course you're not going to go back,' said Ms. Lin, who lives in California. He often returned to Hebei Province, where he grew up. That was also where he was abruptly arrested in the elevator bank of his hotel last April, while going to breakfast with Ms. Lin, she said. She said she did not know why Mr. Lee was being targeted. Ms. Lin has not been able to see her husband since he was detained, except for once briefly when he appeared in court, she said. But she had heard from representatives of the United States Embassy, who were allowed to visit him, that he was in poor health and appeared to have lost around 50 pounds. John Kamm, the founder of the Dui Hua Foundation, a California-based organization that works to free political prisoners in China, said that Mr. Lee should have been released on humanitarian grounds, as China has done in the past, when a person is at risk of dying. He argued that the sentence was too heavy, and reflected the 'appalling state of U.S.-China relations.' He noted that Mr. Lee was arrested while the White House and the Chinese government were negotiating the releases of other American prisoners. Reached by phone, the judge in the case, Lin Sen, declined to comment. The Chinese Foreign Ministry did not respond to a request for comment. The United States Embassy in Beijing declined to comment. The main incident in the case took place in March 2001, in Mr. Lee's hometown, Baoding, in Hebei. According to the indictment, Mr. Lee, after learning of a business dispute involving an acquaintance, drove three people to the site of the dispute, where they began fighting with another group, using knives taken from the trunk of Mr. Lee's car. One of the men in the opposing group was stabbed and died. Then Mr. Lee and his acquaintances drove away. The people whom Mr. Lee drove were sentenced to prison. Mr. Lee, according to the verdict, said that he had not gotten out of the car. Other witnesses said the same. In the United States, people convicted of driving getaway cars have been charged with murder and received prison sentences ranging from a few years to life. The judge in China said he sentenced Mr. Lee more lightly because he was an accessory rather than a direct participant in the violence. Ms. Lin acknowledged that, since her husband had driven the car, she would have accepted a short prison sentence. But she thought five years was excessive. The police detained Mr. Lee after the fight, but prosecutors did not authorize his formal arrest, the verdict said. He was 'released on guarantee,' a form of bail. (Under Chinese law, criminal suspects must be released after 35 days if investigators have not gathered enough evidence to press charges. But the investigation can remain open.) About a month later, Mr. Lee flew to the United States. The court accused Mr. Lee of jumping bail, but Ms. Lin said that her husband had not been aware of any travel restrictions. She noted that he had not been formally arrested, and that he started returning regularly to China around 2004 or 2005, without incident. His lawyers have filed an appeal.
Japan Times
20-03-2025
- Politics
- Japan Times
Canada condemns China's execution of 4 Canadians on drug charges
China has executed four Canadians over drug-related convictions, Canada's foreign affairs minister said Wednesday, a development that threatens to worsen an already-tense relationship between the two countries. Melanie Joly, the Canadian minister, told reporters that she condemned the executions, and that the government would still seek clemency for others. "We will continue to engage with China as we'll continue to not only strongly condemn but also ask for leniency for other Canadians that are facing similar situations,' Joly said. The Chinese Embassy in Ottawa, Ontario, did not provide details on the executions but defended Beijing's strict penalties on drug-related crimes. The executions were first reported by The Globe and Mail. The newspaper said that the executions had taken place this year, citing Canada's Department of Global Affairs as saying so Wednesday in response to a question from the news outlet. Joly told reporters that she and the former prime minister, Justin Trudeau, had asked Beijing for leniency in recent months to try to prevent the executions. She said those involved were dual nationals of Canada and China. (China does not recognize dual citizenship.) The Globe and Mail cited a statement from Ottawa condemning the killings as "inconsistent with basic human dignity.' The department did not immediately respond to a request for comment. John Kamm, the founder of the Dui Hua Foundation, a human rights group in San Francisco that has campaigned for people on death row in China, said he had been helping to lobby China on behalf of the four individuals but was unable to share their details for privacy reasons. He said that the four were men and that their cases were handled in the southern province of Guangdong. Kamm noted that it was "highly unusual' for China to execute four foreigners within a short time frame. The four Canadians' cases had been under judicial review in China for two years before they were executed, Kamm said. China has executed four Canadians in a development that threatens to worsen an already-tense relationship between the countries. | bloomberg Canada's relationship with China has deteriorated since late 2018, when the Chinese government jailed Michael Spavor and Michael Kovrig, two Canadians in China. That move came after Canada arrested Meng Wanzhou, an executive at the Chinese telecommunications giant Huawei, in Vancouver, British Columbia, at the request of the U.S. government. China's detention of Kovrig and Spavor was widely condemned in Canada as hostage diplomacy. In 2021, Spavor and Kovrig were released after Meng was allowed to return to China. In recent years, the former prime minister, Trudeau, and senior members of his Cabinet increasingly criticized China publicly over human rights issues. Concerns have also grown over Chinese interference in Canadian affairs, including allegations that candidates in an election had received secret, illegal funding from China. Joly had called China an "increasingly disruptive global power' and warned Canadian companies about the potential risks in doing business there. More recently, Canada has faced growing concerns that Chinese goods were flooding into Canada. Trudeau announced last year that Ottowa would impose 100% tariffs on Chinese electric vehicles, aligning Canada with the United States. On Wednesday, Joly said that the details of the four Canadians who were executed were not being revealed at the request of their families. She said they had been facing criminal charges linked to drugs, according to China. The Chinese Embassy, without providing details, said that the cases were handled according to law. "The facts of the crimes committed by the Canadian nationals involved in the cases are clear, and the evidence is solid and sufficient,' it said. The embassy urged Canada to respect China's judicial sovereignty and "stop making irresponsible remarks.' At least one other Canadian faces the death penalty in China — Robert Lloyd Schellenberg, who has been convicted of drug trafficking. He had initially been sentenced to 15 years in prison. But in 2019 he was handed a death sentence in a one-day retrial, one month after the Canadian authorities arrested Meng. "Foreigners, like every person in China, are at risk of all kinds of arbitrary detentions and unfair trials,' said Maya Wang, the associate China director at Human Rights Watch. "The universe of cases is really big and we only hear about some of them occasionally.' After the release of Kovrig and Spavor, people had hoped for a thaw in relations, but that has not taken place on a substantive scale, said Lynette Ong, a professor in Chinese politics at the University of Toronto. The timing of these executions is a way for Beijing to keep up the pressure and keep up the leverage over Canada in bilateral discussions, Ong said. This article originally appeared in The New York Times © 2025 The New York Times Company
