By James Pomfret and Angel Woo
HONG KONG (Reuters) – China is increasingly barring people from leaving the country, including foreign executives, a jarring message as the authorities say the country is open for business after three years of tight COVID-19 restrictions.
Scores of Chinese and foreigners have been ensnared by exit bans, according to a new report by the rights group Safeguard Defenders, while a Reuters analysis finds an apparent surge of court cases involving such bans in recent years, and foreign business lobbies are voicing concern about the trend.
“Since Xi Jinping took power in 2012, China has expanded the legal landscape for exit bans and increasingly used them, sometimes outside legal justification,” the Safeguard Defenders report reads.
“Between 2018 and July of this year, no less than five new or amended (Chinese) laws provide for the use of exit bans, for a total today of 15 laws,” said Laura Harth, the group’s campaign director.
Attention on the exit bans comes as China-U.S. tensions have risen over trade and security disputes. This contrasts with China’s message that it is opening up to overseas investment and travel, emerging from the isolation of some of the world’s tightest COVID curbs.
The Reuters analysis of records on exit bans, from China’s Supreme Court database, shows an eight-fold increase in cases mentioning the bans between 2016 and 2022.
China last week beefed up its counter-espionage law, allowing exit bans to be imposed on anyone, Chinese or foreign, under investigation.
Most of the cases in the database referring to exit bans are civil, not criminal. Reuters did not find any involving foreigners or politically sensitive subversion or national security issues.
By comparison, the U.S. and European Union impose travel bans on some criminal suspects but generally not for civil claims.
DUE DILIGENCE
China’s Ministry of Public Security did not respond to Reuters requests for comment on exit bans, including inquiries on how many individuals, including foreigners, are subject to them.
One person prevented from leaving China this year is a Singaporean executive at the U.S. due-diligence firm Mintz Group, according to three people familiar with the matter.
The company, the executive and China’s Public Security Bureau did not respond to requests for comment.
Mintz said in late March the authorities had raided the firm’s China office and detained five local staff. The foreign ministry said at the time Mintz was suspected of engaging in unlawful business operations. Police visited Bain & Co’s office in Shanghai and questioned staff, the U.S. management consultancy said last week.
“Because of rising tensions between the U.S. and China, the salience of this (exit ban) risk has risen,” said Lester Ross, a veteran lawyer in China who has handled exit ban cases.
“I’ve seen a rise in companies and entities being concerned about this and asking for our advice on how to prepare and reduce risks” of exit bans, said Ross, the head of the American Chamber of Commerce’s China policy committee.
‘UNCERTAINTY IS HUGE’
Foreign businesses are concerned about the heightened scrutiny and the vague wording of the counter-espionage legislation, which says exit bans can be imposed on those who cause “harm to the national security or significant damage to national interests”.
“The uncertainty is huge,” said Jorg Wuttke, head of the European Union Chamber of Commerce in China. “Can you do due diligence? Clarity has to come.”
The EU chamber told Reuters in a statement: “At a time when China is proactively trying to restore business confidence to attract foreign investment, the exit bans send a very mixed signal.”
People barred from leaving China include regular Chinese embroiled in financial disputes as well as rights defenders, activists and lawyers, and ethnic minorities such as Uyghurs in China’s north-western Xinjiang province, according to the Safeguard Defenders report.
It cites a Chinese judicial report saying 34,000 people were placed under exit bans between 2016 and 2018 for owing money, a 55% rise from the same period three years earlier.
Some activists say the wider use of exit bans reflects tighter security measures under President Xi.
“They can find any reason to stop you from leaving the country,” said Xiang Li, a Chinese rights activist who was denied exit for two years before escaping from China in 2017 and later receiving asylum in the United States.
“China doesn’t have the rule of law,” she told Reuters by phone from California. “The law is used to serve the purposes of the Chinese Communist Party. It’s very effective.”
(Reporting by James Pomfret and Angel Woo; Additional reporting by Engen Tham and Brenda Goh in Shanghai and Michael Martina in Washington; Editing by William Mallard)
