China says it’s ‘worthy of trust’ but detentions and a death penalty are spooking businesses

What in the World, a free weekly newsletter from our foreign correspondents, is sent every Thursday. Below is an excerpt. Sign up to get the whole newsletter delivered to your inbox.

China has spent much of this year telling the world it is open for business. Nothing could have damaged that image further than the suspended death sentence it handed down this week to Australian academic and Chinese government critic Yang Hengjun.

Yang Hengjun has been detained in China since January 2019.Credit: Tanya Lake

Chinese Premier Li Qiang told world leaders at Davos in January that China was “a country most worthy of trust” and that choosing to do business there “is not a risk, but an opportunity”.

Big business no longer shares his optimism. Last year, for the first time, foreign companies not only failed to reinvest in China, but started selling their existing investments, pulling more than $152 billion out of its economy, according to the Peterson Institute for International Economics.

Beijing’s campaign against foreigners working in China is playing a leading role in driving them out.

In April and May, Chinese authorities raided the offices of US consultancy firm Capvision. Then exit bans were placed on executives from financial advisory firm Kroll and global investment bank Nomura. In October, a Japanese businessman working for drugmaker Astellas Pharma was formally arrested on espionage charges.

In January, China’s Ministry of Foreign Affairs said that a former Pfizer employee had been sentenced to five years in jail for “obtaining intelligence for overseas actors”. The guilty verdict for 70-year-old British citizen Ian Stones was handed down in September last year. Beijing just took five months to make it public.

These executives may well have committed crimes, but it is impossible to know what the red lines are in China’s black box of a justice system. That fear is spooking businesses, making them hesitate to send staff into what was once the world’s top investment destination.

“You see this stuff in the movies. It feels very Hollywood-ish, but it is unnerving,” Dale Buckner, chief executive of Global Guardian, a US private security firm, told The Wall Street Journal.

The severity of Yang’s sentence − the highest ever handed down to a foreigner for espionage − shocked even the most seasoned observers.

John Kamm, who has worked with prisoners in China for more than three decades, said it was “unheard of”.

Lowy Institute senior fellow Richard McGregor said it displayed on “a wide screen the opacity of the Chinese legal system” and “its vindictiveness to people who challenge it”.

Lawyers condemned the legal system for running the trial behind closed doors, on top of the years of pre-charge detention and restrictions on independent legal advice.

“Dr Yang’s sentence falls far short of international standards,” said Law Council of Australia President, Greg McIntyre SC.

Yang’s suspended death sentence shattered the illusion that foreigners are likely to face a lighter punishment in the Chinese system.Credit: Bloomberg

Far from unusual, Yang’s treatment is the norm in a country with an increasingly punitive legal system geared around extracting a confession to maintain a conviction rate of 99 per cent.

Despite the threat of death, Yang has always maintained his innocence over the vague claims of espionage made against him. Human rights groups estimate there are 5000 foreigners in Chinese jails. At least 50 of them are Australian.

The day after Yang’s sentence was handed down, Chinese activist Li Qiaochu was convicted of “subversion of state power” after she shared articles about the torture to which her jailed partner, Xu Zhiyong, was subjected.

Li will now join Xu and more than 1 million other locals languishing behind bars, after being sentenced to almost four years in prison.

Yang’s suspended death sentence shattered the illusion that foreigners are likely to face a lighter punishment in the Chinese system. Perhaps that is because he did not yield to it.

“I have no fear now. I will never compromise,” he said in a letter to his two sons before his trial in Beijing. “I love you all and I know that I am loved.”

Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for the weekly What in the World newsletter here.