As tensions between Washington and Beijing escalate, foreign executives and U.S. nationals are finding themselves detained or subject to exit bans.
Commentary
The Chinese Communist Party (CCP) is stopping certain foreigners from leaving China. This policy is shrouded in legal ambiguity and, at the very least, raises alarms over freedom of movement, international investment, and diplomatic norms.
But the implications could be far worse.
Exit Bans: A Looming Threat for Foreigners in China
China is increasingly enforcing “exit bans”—legal restrictions preventing individuals from leaving the country—against both Chinese and foreign nationals. Vaguely defined national security reasons justify them.
Though not new events, exit bans became more common after Xi Jinping assumed power in 2012. They have, however, ramped up significantly of late. Between 2016 and 2022, mentions of exit bans in China’s Supreme People’s Court database rose eightfold, according to human rights group Safeguard Defenders.
Originally tied to legal disputes, the scope has broadened under national security laws enacted or amended from 2018 onward.
Recent High-Profile Cases Raise More Concerns
In one instance this past July, a U.S. citizen and managing director at Wells Fargo based in Atlanta was barred from leaving China. Authorities stated she was “involved in a criminal case,” though details remain undisclosed. In response, Wells Fargo suspended all employee travel to China.
A naturalized U.S. citizen and employee of the Patent and Trademark Office was stopped upon arrival in Chengdu in April and blocked from exiting. Reports suggest this stemmed from his failure to disclose his U.S. government affiliation on his visa. The case is widely regarded as the first involving a U.S. federal worker under an exit ban.
It’s important to note that these cases are qualitatively different than stopping a foreigner from leaving for any specific crimes they may have committed. These cases are ominous due to the professional and governmental profiles of the detainees. The non-transparent, abrupt application of exit bans appears to be aimed at targeting diplomats, businesspeople, or government staff.
Widespread Impact on Foreign Executives, Companies
What’s more, the bans go beyond just American citizens to a broad range of foreign businesspeople.
For example, executives from Astellas Pharma, AstraZeneca, Nomura, UBS, and Kroll—companies from Japan and Europe—have been investigated or placed under travel curbs.
On occasion, an exit ban may extend to individuals not even directly implicated in legal proceedings. This highly irregular practice of law enforcement gained wider fame when due diligence and consulting firms such as Mintz were targeted, which resulted in staff detentions and significant fines.
Such bans and corporate persecution only cast more shadows of doubt over China’s deteriorating business climate.
By James Gorrie
