It’s Only a Matter of Time Before China Detains U.S. Executives

The Wall Street Journal reported recently that People’s Republic of China (PRC) officials have been warning repeatedly and through multiple channels that they intend to detain Americans. The threatened detentions are expressly in response to U.S. law enforcement prosecutions of PRC scholars.

In many PRC-watching circles, this news likely elicited a simple shrug. The PRC has always viewed law enforcement as a tool of the state, meant to serve the political goals of the Chinese Communist Party (CCP) rather than serve the idea of justice. PRC authorities have often tried to use law enforcement actions to influence or exert leverage—but they have never been so explicit in their threat to do so. Until now, they have always been quick to disabuse others of the notion that their law enforcement actions are in retaliation for anything. 

Two previous and prominent examples of such attempts to exert influence show the occasional hazards of being the citizen of a country that is a law enforcement partner of the United States. In 2014, a Canadian couple, Kevin and Julia Garratt, were arrested in the PRC seemingly in response to the arrest of a Chinese citizen, Su Bin, by Canadian authorities at the request of the United States. Su later admitted that he had conspired with two unnamed individuals in the PRC to illegally export U.S. military information. The PRC, meanwhile, accused the Garratts of running an espionage ring out of their coffee shop in northeast China—an assertion their family denied.

The PRC used the same tactic again in 2018. After Canadian law enforcement arrested Huawei CFO Meng Wanzhou, at the request of the United States, two Canadian citizens were arrested in the PRC and subsequently charged with espionage. While the Garratts have returned to Canada, Michael Kovrig and Michael Spavor continue to be held in the PRC.

With these retaliatory detentions, the CCP is finally admitting what has largely been obvious: Law enforcement in the PRC serves the needs of the party. The CCP uses the full spectrum of enforcement actions—hotel imprisonments, exit bans, detainments, arrests and even prosecutions—to express its dissatisfaction or coerce people into compliance. With the direction things are going, it will not be long before the first American is detained in the PRC explicitly as a retaliatory measure—and when it occurs, no one should be surprised. 

The first American to be detained will likely be one traveling on business. As a group, businesspeople make up the largest proportion of travelers from the United States to the PRC. While an employee of the U.S. government would make a provocative target, such people are usually—though not always—traveling to the PRC with at least some immunity provided by the Vienna Convention on Diplomatic Relations. Businesspeople lack these protections. 

And detaining an American on business could provide political and economic advantages to the PRC. The detention of a businessperson might result in the U.S. business community seeking to pressure the U.S. government to stop taking law enforcement action against PRC government-affiliated individuals. What’s more, in exchange for the detained person’s freedom, the PRC could extract highly valuable proprietary information from the individual or the individual’s employer.

The recent retaliatory threats of detention are illustrative of the new fierce geopolitical competition raging. As we have written, companies—and now their executives and employees—are on the front lines. Nation-states will use any and all tools to advance their economies and, by extension, their power. This new reality poses an existential challenge for U.S. businesses as geopolitical competition spills into nontraditional areas. As a result, there is intense pressure on the international institutions and global norms that, in decades past, channeled competitive forces into productive resolutions. As institutions and norms crack, nation-state relationships suffer, which has led to an increased willingness by some to engage in unbridled and unscrupulous activity. The result is more competition and chaos—and U.S. businesses are being, and will continue to be, affected.

As part of this dynamic, reports suggest that the PRC is likely sending its military-affiliated scientists to the United States in order to secure critical research information. This activity is likely organized and supported by an intelligence service of the PRC, which believes that its intelligence services should assist PRC companies, both public and private, with acquiring sensitive technology and research. At times, that acquisition may be legal and blatant, but just as often it may be illegal and surreptitious. 

If you consider, as we have written previously, that the PRC government sees the country’s businesses as a key component of its national power, the logic becomes clear. It is merely using government resources to ensure the success and ultimately the dominance of their businesses within the PRC and throughout the world. As such, the PRC government believes that its activities in this regard are protecting the PRC’s national security, a core tenet of any country. 

The Department of Justice has taken law enforcement action in response to this espionage operation. The U.S. government believes that espionage for commercial use is illegal and as such against a core tenet of the country. The use of law enforcement resources to protect the ideals of justice and law and order is a logical and expected response of the U.S. government. 

The United States and the PRC are talking past each other in terms of what is acceptable intelligence and law enforcement activity. They continue to disagree about the appropriate response when the other side objects to such activity. While the United States believes its arrests are justifiable law enforcement action, the PRC views this as U.S. political activity—because, from the perspective of the PRC government, that’s what law enforcement is for. In the PRC’s understanding, the United States is exercising a lever of state power to register its disagreement with PRC behavior. Thus, in the mind of the CCP the arrests are about power, not justice—and so the party is responding in kind with the threat of detainment.

The United States has attempted on numerous occasions to dissuade the PRC from using espionage for commercial gain, but those efforts have failed—perhaps most spectacularly in 2015 with the U.S.-China Cyber Agreement. The PRC is highly unlikely to change its behavior in the near future, short of the United States being able to imperil something that the PRC considers even more essential to its national security. That means that the PRC will keep sending people to the United States to acquire, by any means necessary, the technology and research they need for economic development, and the United States will continue to arrest them. And now, the PRC will respond, it believes in kind, with the detention of an American.

Despite the high probability of such a detainment, many businesses have lured themselves into a false sense of security, believing the PRC would never jeopardize the country’s business environment for such a minor victory. Any detainment of a U.S. businessperson for political purposes, businesses reason, would lead U.S. businesses to collectively and suddenly sour on doing business in the PRC, for fear of being caught in the middle of a geopolitical struggle. And so, on this logic, PRC authorities will seek to avoid this outcome by conspicuously refraining from any actions that would precipitate it. 

Unfortunately, many PRC-watchers expressed just such pragmatic logic about a potential crackdown in Hong Kong. Any heavy-handed action, they thought, would be so destructive to the incredibly lucrative business environment that PRC authorities would avoid it at all costs. Yet in the past couple of years in response to mass demonstrations, PRC authorities have prioritized national security over the business environment, especially with the introduction of a new national security law. U.S. businesses are also tempted to imagine that they are somehow exempt from this risk: Someone might get detained, the reasoning goes, but my company is too important—or too unimportant, as the case may be—to be affected. Or businesspeople reason that they know enough high-level officials to ensure their safety during their visits. It’s these types of rationalizations that have allowed many companies to falsely believe they will never be the victim of economic espionage or trade secret theft. They are all mistaken.

There is no shortage of examples displaying the PRC’s use of law enforcement tools as an instrument of state power. Some U.S. corporate executives have experienced this firsthand in the PRC. When visiting the PRC to negotiate a new deal or more often to seek resolution of a disagreement with a local partner, a not-insignificant number of executives have been imprisoned within their own hotel rooms, with the exit from their room physically blocked by individuals loosely—or at times directly—affiliated with local law enforcement authorities. The executives were eventually allowed to leave, but only after having agreed to business terms that under normal circumstances would be unacceptable. The embassy can lodge protests during the detention, but embassy officials are often at the mercy of central authorities in Beijing for even basic information regarding the individual. The P

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