Chinese-Canadian Business People Working in China: Risky?

Over the years there have been many an example where business people of Chinese descent, Huaqiao or Huayi, have gone to China to do business, some commercial disputes have arisen, and these Chinese foreigners have been thrown in jail, passports confiscated, for a prolonged period of time. As someone with a business degree, and who can speak Chinese, this risk is more than a possibility.

This is not to say that non-Chinese business people have immunity. They have also been thrown into jail for commercial disputes, but seemingly not as often.

Who is Chinese?
To begin let us define who is actually considered, by written Chinese law, or even maybe just Chinese government thought, who is a Chinese citizen. If you are born in China, Hong Kong, or possibly even Taiwan, you are, by jus soli a Chinese citizen.

Jus soli: meaning “right of the soil”,[1] commonly referred to as birthright citizenship, is the right of anyone born in the territory of a state to nationality or citizenship.

If you are a Chinese citizen, by China’s definition, who then moves away and gains citizenship in a third country, such as Canada, with only one exception, you are still considered, in China’s eyes, a Chinese citizen. That is because China does not recognize dual citizenship. For example if you are a Chinese bookseller in Hong Kong, gain Swedish citizenship, return to Hong Kong and get arrested, you are a Chinese citizen. There is very little the Swedish Consulate can do for you. The one exception is if you formally renounce, in writing, your Chinese citizenship. Only then you may have a chance.

Chinese law says:

Article 9
Any Chinese national who has settled abroad and who has been naturalized as a foreign national or has acquired foreign nationality of his own free will shall automatically lose Chinese nationality.

although this law has been broken so many times when it is convenient for China. If you were born in China I would not rely on this law to protect you.

Who is Huayi or Huaqiao
Huayi 华裔 are those of Chinese descent who are not born in China. Huaqiao 华侨 are those Chinese who are born in China but have moved to live outside of China. Both are considered special cases of being Chinese, and not as foreign as if you were white or black.

The Concern for Canadian Business People Doing business in China
David Mulroney, former Canadian ambassador to China from 2009 to 2012 says there is a increased risk to Canadian business people that if in China there is a commercial dispute, they could be thrown into jail for a prolonged amount of time and having their passports seized. This risk seems to be elevated for those that are Chinese Canadians. He has urged the Canadian Government to issue a prominent warning about the risks to Canadian business people in dealing with China.

Mr Mulroney comments on a recent case, where John Chang, a Richmond, B.C., businessman has been imprisoned in China for more than 20 months over a customs dispute. His wife, Allison Lu, has had her passport confiscated so she cannot leave China. Mr Chang is battling cancer in a Chinese jail, and there is a high likelihood that he will not be treated.

“It’s an all-too-common occurrence and it’s designed to intimidate the foreign party. … Suddenly a commercial dispute you would willingly fight out in court is now a matter of your own freedom – and it’s very hard for people not to crumble under that kind of pressure,” the former envoy said.

He noted that these incidents seem to happen particularly to Canadians of Chinese origin. “I don’t know why that is – maybe the Chinese feel they could treat these people with impunity.”…

“If a Canadian business person who has been a poster boy for doing business with China is wrongfully imprisoned that is a very difficult and very real issue,” he said.

I would like to have been shocked by his message, but again, this is not a first case. Moreover, this seems to be a habitual and systemic trend.

Cases
Rio Tinto

SHANGHAI (Reuters) – A Chinese court sentenced four Rio Tinto employees to 7 to 14 years in jail on Monday for taking bribes and stealing commercial secrets, a verdict the Australian government called harsh.

The Shanghai Intermediate People’s Court said China-born Australian citizen Stern Hu, who headed Rio Tinto’s iron ore operations in China, will serve 10 years, with parts of a 7 year bribery term and a 5 year secrets sentence running concurrently. Rio Tinto bribery case

Rio Tinto

Australian merchant Banker

Two weeks ago the Australian-educated merchant banker and business entrepreneur walked out of a Sydney prison and his first words were a warning to anyone doing business in China.

Mr Ng had lost almost everything; his booming travel business, his eldest daughter, and now his wife is gravely ill.

In his first exclusive interview since being released from prison, Mr Ng told Lateline how the successful world he built for himself and his family came crashing down in 2010 when he was arrested in his hometown in China and sentenced to 12-and-a-half years in prison. Australian Matthew Ng

Crown Resorts

Crown Resorts head of international high-roller operations, Jason O’Connor, will be released on August 14 after being handed a ten-month jail sentence in China for gambling-related crimes, including time served.

Two other Australian Crown staff members, Pan Dan, who goes by the English name Jenny, and Beijing-based Jerry Xuan, a director of international marketing, were given nine-month sentences, including time served. The Crown staff were detained in a series of overnight raids last October, which means the two Australians will be released next month. Crown Resorts Executives

Canadian Winery Owner

Charges of smuggling against a Canadian winery owner who has been locked up in a Chinese jail for more than a year are trumped up, his lawyers say, accusing China of criminalizing a customs dispute, one that could have far-reaching consequences for an eventual bilateral free-trade deal.

John Chang, who owns wineries in British Columbia and Ontario, will face a closed-door trial at the Shanghai High People’s Court next Friday, as will his wife, Allison Lu. Ms. Lu was released from jail in January, but is barred from leaving China and must report regularly to Chinese authorities. The couple’s Canadian passports have been seized. BC Winery Owners

Kevin Garrat

Kevin Garratt, the Canadian man held in China for two years on suspicion of spying, arrived back in Canada Thursday following a court ruling granting his release.

Garratt was arrested, along with his wife Julia, in August 2014 in Dandong, a city that borders North Korea. The Garratts had operated a Christian coffee shop in the city since 2008. Kevin Garratt

Canadian Research Analyst

Canadian stock analyst Kun Huang has been locked in a Luoyang, China, jail for more than a year, charged with defaming a Canadian company whose shares trade on the New York and Toronto exchanges. In 2011, a report circulated by Huang’s hedge-fund employer alleged that ore samples from a mine run by Silvercorp Metals tested low for silver content. Unluckily for Huang, Silvercorp’s mine is a prominent enterprise in Luoyang, the city in the central province of Henan where prosecutors have charged that he not only defamed the company but used an illegal camera to shoot video of its operations. After a one-day trial on Sept. 10, the analyst, 36, now waits to hear whether a judge will find him guilty and sentence him to three more years in prison. A Canadian consul described the Luoyang jail as “atrocious.” Few trials in China end in acquittal. Canadian stock analyst jailed for research on Chinese firms wanting to list, 2