Rogue Nation

China’s Tactic to Catch a Fugitive Official: Hold His Two American Children
By Edward Wong and Michael Forsythe

Victor and Cynthia Liu, American citizens who have been banned from exiting China, in an image provided by family friends.

WASHINGTON — When Victor and Cynthia Liu landed with their mother on a tropical Chinese island in June to visit an ailing grandfather, they thought they would soon be on a plane back to their East Coast lives — he to start his sophomore year at Georgetown University, and she to work at the consulting firm McKinsey & Company in New York.
Instead, within days, police officers detained their mother, Sandra Han, who, like her children, is an American citizen. 

They moved her to a secret site, commonly known as a black jail. 

The children discovered at the airport that they could not leave China, even though the police had said they were not being investigated or charged with a crime, the children told American officials and family associates.
By holding the family hostage, they said, the police are trying to force the siblings’ father to return to China to face criminal charges. 

The father, Liu Changming, a former executive at a state-owned bank, is accused of being a central player in a $1.4 billion fraud case.
The children say their father severed ties with the family in 2012, but the Chinese authorities have still held them for months under a practice known as an exit ban — a growing tactic that has become the latest flash point in the increasingly rancorous relationship between the United States and China.
Senior American diplomats, already contending with tensions over trade and territorial disputes, have denounced the way China uses exit bans as coercive, opaque and a violation of rights. 

In January, the State Department issued a travel warning, saying the practice posed risks to foreigners in China. 

Last month, Secretary of State Mike Pompeo criticized the bans during a visit to China, and this month he mentioned the Liu family to a top Chinese foreign policy official, Yang Jiechi, at a meeting in Washington.
The siblings have pleaded their case to American officials, including John R. Bolton, the national security adviser. 

“The investigative officers have made abundantly clear that neither my brother nor I am under any form of investigation,” Ms. Liu, 27, wrote to Mr. Bolton in an August letter obtained by The New York Times. 

“We are being held here as a crude form of human collateral to induce someone with whom I have no contact to return to China for reasons with which I am entirely unfamiliar.”
She made similar points in an email sent in recent days to a family associate, saying that “the Chinese authorities have been consistent that neither Victor nor I are accused of or suspected of any criminal activity,” and that the authorities have repeatedly said that “the reason we are here is exclusively to lure” their father.
On Friday, in response to questions from The Times, a State Department spokesman, Robert Palladino, said the United States would continue expressing concern about exit bans “until we see a transparent and fair process.”
The Chinese Foreign Ministry defended the holding of the three family members, saying: “The people you mentioned are suspected of economic crimes, they are restricted from exiting the country by the Chinese police in accordance with the law.”
This account of the Liu family’s plight is based on interviews with administration and congressional officials, university employees and family associates, as well as correspondence by the children to them and public records. 

There are currently a handful of exit-ban cases involving Americans, but this is the first one in which those with knowledge of it are making the details public.
It is also a rare instance in which one of those being held — Mr. Liu, 19 — was born in the United States. 

More often, China imposes exit bans, which can last from days to years, on naturalized foreign citizens who were born in China. 

Security officers often treat them as if they were still Chinese citizens, even though China does not recognize dual nationality.
Liu Changming, the siblings’ father and a former executive of a state-owned bank, is wanted in a $1.4 billion fraud case.

The law in China states that its nationals automatically lose their citizenship when they gain citizenship in another country. 

It also says that someone like Mr. Liu who is born with citizenship from another nation is not a Chinese citizen, no matter the parents’ citizenship.
The Liu family members all entered China on American passports, and the State Department is providing them with citizen services. 

The police from Guangzhou, the southern provincial capital where the father worked, have taken Ms. Han, 51, to a hotel several times to meet with an American consular officer.
Liu Changming, 53, the father, is among China’s most-wanted fugitives, accused of helping to carry out one of the country’s biggest bank frauds, in which $1.4 billion in illegal loans was issued to property developers. 

He fled the country in 2007.
In recent years, as the Chinese authorities have waged a fierce crackdown on corruption, they have increasingly viewed family members of corrupt officials as being tied to the illegal acts, with the police sometimes aiming to prosecute spouses.
The Liu family has lived with notable wealth in the United States, in part by acquiring real estate, though there is no indication from public records that the properties were purchased with the money that the father is accused of embezzling.
Senator Elizabeth Warren, Senator Edward J. Markey and Representative Joseph P. Kennedy III, Democrats from Massachusetts, where the mother lives, have urged the United States government to act.
“Our office is aware of Victor’s, Cynthia’s and Sandra’s situations and is deeply concerned,” Mr. Markey’s office said in a statement. 

“We are working to secure their safe return and continue to be in touch with U.S. officials to ensure a positive outcome.”

Purgatory With the Police
The Liu children are trapped in a situation far from their elite American lives. 

Both attended Groton, an expensive Massachusetts boarding school. 

Ms. Liu graduated from Stanford and Harvard Business School. 

The family has a $2.3 million house in a Boston suburb, and the mother, a businesswoman, controls or has her name on companies with real estate holdings worth at least $10 million, including two luxury apartments in Manhattan, according to public records.
Since June, the children have tried to leave China three times. 

They travel between cities, staying in hotels or with an uncle. 

Their ailing grandfather died in October. 

They limit their electronic communications because of surveillance.
“Out of concern for the security of these young Americans, we will refrain from public comment as we continue our efforts to constructively and directly engage the Chinese government to allow them to return home,” said David Pressman, a partner at the law firm Boies Schiller Flexner who is representing the Liu children.
The Georgetown president met with the children this month in Beijing. 

Harvard has written to the Chinese ambassador in Washington. 

McKinsey is in touch with Ms. Liu. 

People tracking the case say they hope President Trump will raise the issue at the Group of 20 summit meeting this week in Argentina, where he and Xi Jinping, the Chinese president, are expected to meet.
Secretary of State Mike Pompeo and Defense Secretary Jim Mattis with Yang Jiechi, a top Chinese foreign policy official, this month in Washington. Mr. Pompeo mentioned the Liu family to Mr. Yang.

China has convicted foreigners of crimes and even executed them. 

It has also detained Muslims who are foreign citizens in its northwest internment camp system. 

The exit bans are different — the authorities do not keep the people at a detention site or present a legal justification. 

They use the ban mainly as a means of coercion: to squeeze out information, to compel a relative or friend to return to China, or to force the victim to settle a business dispute.
In one case, an American stayed in China under an exit ban for more than two years. 

A continuing case involves a Singaporean national working for UBS, the Swiss bank, which has prompted UBS to issue travel warnings to its employees.
“Many police actions are now taken outside the legal system, and both Chinese citizens and foreigners, especially those who used to be Chinese citizens, have been kept in China with no apparent legal authority,” said Jerome A. Cohen, a law professor at New York University.
China’s increasing use of the practice is a result of major trends: a growing disregard for civil rights among Chinese security forces; a sweeping anti-corruption campaign started by Xi in 2012; and a rush among corrupt officials and executives to move overseas with their families. 

In 2014, China announced the start of a global campaign to hunt down fugitive former officials.
Many of the former officials live overseas in luxury, with new names and citizenship. 

China has sent secret agents to the United States to try to retrieve some. 

China has also asked the United States to send back former officials, but the two countries do not have an extradition treaty.
American officials have been reluctant to cooperate because of China’s human rights abuses and lack of rule of law, though there have been exceptions — including the repatriation of a former vice mayor accused of stealing $39 million.

The ‘Naked Official’
In 2007, Chinese auditors closed in on what was becoming the country’s biggest bank fraud case. 

Liu Changming fled China that December, state media reported. 

The top official at the Guangzhou branch of the Bank of Communications, he was at the center of the case.
Officials charged him in 2008 with making illegal loans of about 9.8 billion yuan, or $1.4 billion, including some to a company he secretly controlled, according to Caixin, a financial newsmagazine. Officials convicted Liu’s co-conspirators but recovered only half of the money.
In 2015, China put Liu on its “Skynet” list of 100 most-wanted fugitives. 

Interpol issued a “red notice” for his arrest. 

His whereabouts are unknown.
The Financial Times reported in 2009 that after escaping China, Liu took part in shareholder meetings in London for Canton Property Investment Ltd., a company whose Chinese subsidiaries received the illegal loans. 

The company had gone public in London in August 2007 and raised $50 million, but was delisted the next year.
Public records show that a person named Changming Liu is linked to a home in Chestnut Hill, Mass. 

The address matches the one Cynthia Liu lists on her Harvard alumni page. 

The home is owned by Sandra Han, the mother. 

Zillow, the real estate website, estimates its value at $2.3 million.

Liu, who fled China in 2007, was the top official at the Guangzhou branch of the Bank of Communications.

A company controlled by Ms. Han bought the home in 2009. 

Several real estate companies, trusts and limited liability corporations are registered to that address, and they in turn own rental properties in Massachusetts and luxury apartments in New York.
While Liu was moving up the ranks of China’s banking bureaucracy, he became what the Chinese call a “naked official” — someone who settles his family abroad, with relatively easy paths to foreign citizenship and well-regarded schools, and with the Chinese authorities an ocean away.
The mother and daughter moved to California in 1998, and by early the next year they lived in a condominium in Alhambra, a Los Angeles suburb popular with Chinese immigrants. 

In June 1999, Liu and his wife bought a three-bedroom home in nearby Arcadia.
Records show they obtained Social Security numbers in California around this time.
Their son Victor was born in California that July. 

He later lived in southern Chinese cities for five years, leaving Guangzhou in 2007.
The couple sold the Arcadia home in 2004 and bought a house in a gated community in Armonk, N.Y., an affluent town, records show. 

The home was transferred to Cynthia Liu’s name in 2011 and sold in 2014 for almost $900,000.
Ms. Han is a trustee of an entity called Bountiful Success Trust — 2014, which bought a $2.77 million condominium in downtown Manhattan in 2016.
Another company she controls owns a unit at the Lucida on the Upper East Side that Zillow values at $4.17 million.
Like his mother and sister, Victor Liu is interested in business, and he rented a room this summer with Noor Darwish, his first-year roommate, in a Georgetown home to do an internship at his university’s endowment office.
But he left suddenly in June.
He called Mr. Darwish as he was leaving the country.
“He told me he had some family problems, and that his grandfather had had a heart attack,” Mr. Darwish said.
The university has strongly pushed for the siblings’ release.
On his trip to China this month, the Georgetown president, John J. DeGioia, met with senior officials.
With him was Evan S. Medeiros, a professor who had helped negotiate releases of American hostages in North Korea as senior Asia director in Barack Obama’s National Security Council.
The university has a little-known connection to China’s leadership.
A nephew of Chinese dictator Xi Jinping is a recent graduate of Georgetown’s School of Foreign Service.
While at Georgetown, he also interned at the Brookings Institution.
None of that has helped.
With winter break looming, Liu’s friends on campus are asking why he has been absent all semester. “Our room is a lot lonelier now,” Mr. Darwish said.
In China, Liu has been eating and sleeping poorly.
His sister mentioned concerns about her own health in her letter to the White House.
She wrote, “We feel alone, angry, and most of all afraid, and more than anything, we just want to come 'home'.”

The Chinese Can Not Be Trusted to Lead Global Institutions

The abduction of Interpol’s president shows that Beijing’s officials will be subordinate to the orders of the Communist Party.

By BETHANY ALLEN-EBRAHIMIAN

Meng Hongwei

China has spent years trying to gain an equal footing in international institutions originally set up by the West. 

Those efforts have seen gradual success, as Chinese nationals have come to occupy leading positions on United Nations committees, multilateral development banks, international courts, and many other organizations.
So when Meng Hongwei, a high-ranking Chinese Communist Party member who was chosen to serve as the president of Interpol in 2016, disappeared last month while visiting China, and was revealed two weeks later to have been detained by Chinese authorities, it seemed like an unforced error. 

Interpol is an important international organization tasked with facilitating cooperation between police forces in countries around the world. 

But even so, party disciplinary authorities were treating Meng first and foremost as a party member who had strayed from the straight and narrow, rather than as the internationally recognized top official of a major multilateral organization who deserves due process.
Meng’s detention shows that under Beijing’s increasingly confident global authoritarianism, China’s participation in and even its leadership of international institutions will be openly subordinate to the diktat of the Communist Party. 

This stands in stark contrast to the preceding eras under previous Presidents Hu Jintao and Jiang Zemin, when China paid lip service to following international law and to becoming a conforming member of the current international system.
The circumstances under which Meng disappeared highlight the authority the party still wields over Meng, even while he served as the head of a supposedly politically neutral institution. 

His disappearance first became known when his wife reported his absence to police in France, where the couple lives, and the French police launched an investigation. 

His wife had begun to worry for his safety when she received a knife emoji in a text message from her husband, taking it as a coded warning that all was not well on his trip home.
On October 7, almost two weeks after Meng went missing, Chinese authorities announced that they were charging Meng with bribery. 

After coming to power in 2012, Chinese dictator Xi Jinping launched a sweeping anti-corruption crackdown that has felled thousands of mid-level party cadres and numerous high-ranking officials.
But experts say the anti-corruption campaign is used as cover for political purges intended to strengthen Xi’s grip on power. 

There are hints of a political element in Meng’s detention; when announcing the charges against Meng, Chinese authorities also stressed the need for “absolute loyal political character.” 

Meng is now being held in a custody system notorious for torture, abuse, and denial of access to lawyers or a fair trial. 

It is certainly normal for any country to prosecute government officials for corruption; it is not normal to detain them without notice or charge, then thrust them into a system without fair representation or transparency.
That raises serious questions about the fitness of any member of the Chinese Communist Party to serve in a leadership position in international organizations. 

Meng’s detention is a clear sign that any party members abroad, no matter how high their profile or how important political neutrality is to their position, are still subject to the will and demands of the party—a party that’s willing to punish them at any cost if they stray. 

This is far truer under Xi than under his recent predecessors because one of Xi’s top goals has been to revitalize the once-moribund party, reestablish it as the main guiding force in China, and double down on party discipline.
It’s clear that Meng was the party’s man at Interpol. 

During his tenure as Interpol president, Meng simultaneously served as a vice minister in China’s public-security bureau, the country’s chief law-enforcement institution. 

It’s unlikely he could have risen to such a high position without demonstrating years of loyalty to the party. 

And the public-security bureau is behind illegal detentions and numerous other injustices visited upon a populace with few civil-rights protections. 

That means Meng spent his career climbing the ladder within a ruthless organization.
Thus, Meng’s election in 2017 to the position of Interpol president, though a largely ceremonial post, raised concerns that China would use Meng’s position to pursue political dissidents through the issuance of Interpol red notices. 

A red notice is roughly equivalent to an international arrest warrant requested by an individual government, and Interpol approves requests based not on an assessment of the target’s guilt but rather on whether the requesting government followed the appropriate laws and regulations in making the request. 

This makes the red-notice system notoriously easy to abuse; Russia, China, Turkey, Venezuela, and some Central Asian nations are known to request politically motivated red notices targeting political foes and journalists. 

Interpol member nations are not required to detain or extradite those with a red notice against them, though many do.
And indeed, shortly after Meng became president, Interpol issued a red notice for Guo Wengui, an exiled Chinese billionaire who had recently threatened to release compromising information on leading members of the Communist Party.
But not everything went so smoothly for China, or for Meng. 

In February, Interpol rescinded a red notice, originally issued at China’s request, for Dolkun Isa, the Europe-based president of World Uyghur Congress, a group that advocates for a beleaguered Chinese ethnic minority. 

Beijing claims that Isa is a terrorist, and China has frequently requested that European governments arrest and deport him.
Some observers noted that about six weeks after Isa’s red notice was revoked, Meng was removed from his post as a member of the public-security bureau’s party committee, the party organ embedded inside the bureau to provide leadership and ideological guidance, leading to speculation that the party was unhappy with Meng for allowing Interpol to remove the notice.
“Look at East Turkestan,” wrote Bill Bishop, the author of the influential Sinocism newsletter, referring to the Chinese region where an estimated 1 million Muslims are being held without due process. 

“Does Beijing care if there is fleeting concern over the fate of their Interpol appointee?”
These days, Beijing seems far less concerned about the opinion of the liberal West than it once was. Rather than continuing to try to hide the existence of its concentration camps in East Turkestan, Chinese officials are declaring them to be a true societal good. 

In the contested South China Sea, China now rarely claims that it aims to uphold international law—instead, it emphasizes that no one has the right to criticize its island building and militarization there. 

Might makes right, as it were.
At the same time, Beijing wields greater sway over international institutions than ever before. 

That means stakeholders in the international system would do well to ask themselves what price they might pay if they offer leadership positions to Chinese Communist Party members. 

It’s likely that as China promotes its authoritarian system around the world, one will increasingly see the party justify and even tout its realpolitik approach to international power. 

A liberal world order built on human rights and rule of law will need to find an effective response—and soon.

China anti-corruption campaign backfires

Xi Jinping drive to cleanse Communist party of graft tarnishes its image
by Hudson Lockett in Hong Kong

Xi Jinping’s high profile anti-corruption campaign has fallen short of its stated goal and appears to be doing more harm than good to the image of China’s Communist party, according to new academic research and an analysis of official statistics.
The Chinese president’s drive against graft, now nearly four years old, is one of the most powerful and far-reaching campaigns in the country since Mao Zedong’s death in 1976.

But a new study suggests that it has backfired, with citizens often blaming local graft on the central government rather than on regional authorities, while an FT analysis indicates that the odds of officials being punished for corruption are slim.
“I don’t see any clear political will” to seriously punish corrupt officials at the grassroots level, said Fu Hualing, a law professor at the University of Hong Kong. 

“Maybe they understand that is probably very destructive if China does that in every county, every district,” he said. 

“The whole country would probably be in chaos.”
The campaign’s stated aim is to hold all levels of Chinese officials accountable for abuses of power. 

Many scholars of Chinese government say its underlying purpose is to make party cadres more responsive to orders from on high while burnishing the party’s image.
But the new study finds that the higher the number of reported graft cases in a prefecture, the more people in the area perceive Beijing as being more corrupt than their local government.
Ni Xing and Li Zhen at the Institute of Governance and Public Affairs of Guangzhou’s Sun Yat-sen University, who conducted the study, attribute this finding to the centralisation of power.

“If local government is overflowing with corruption, people will gradually shift responsibility for that to the centre as they perceive the centre’s failure of management to have led to such a state of affairs,” they write.
The study, which surveyed 83,300 people nationwide by telephone, was published in the latest edition of China’s Journal of Public Administration. 

The findings suggest that the campaign’s scope and length may inflict lasting damage on the party leadership’s image.

Prof Fu suggested that one alternative that could permanently reduce corruption is to shift the focus of anti-corruption efforts from the Communist party to the courts.
But Xi has rejected greater separation of powers in favour of maintaining the party’s leading role. Data from China’s procuratorate, the state body ostensibly charged with prosecuting corruption, show that it has ceded substantial ground to the party apparatus in confronting graft during his tenure.

The analysis of official statistics by the Financial Times also shows that, for the vast majority of China’s Communist party cadres in the civil service, the chances of being seriously punished for corruption remain slim. 

In the first three years of the campaign, fewer than 36,000 party members were handed over to China’s courts for prosecution — less than 0.5 per cent of the 7.5m working as officials in 2015.
While almost 750,000 cadres were disciplined by the party over the same period, experts on party disciplinary mechanisms stress that most such cases amount only to a warning or demerit.

Academics who have studied China’s past anti-corruption drives say that the severity of the campaign appears to be carefully managed.
Ding Xueliang, a social science professor at Hong Kong University of Science and Technology, said cadres had told him that for party organisations of any size there was now in effect a requirement to discipline at least a few members. 

Otherwise, “the upper levels will come back to you and question why your party branch is so unique — because so many other party branches have had five, 10, 20 officials charged for corruption.”
Prof Ding dismissed the idea that the campaign is seriously intended to stamp out graft for good, estimating perhaps 80 per cent of officials had engaged in some form of corruption during their careers. 

“If you have lived in China for five years or more … you would not have such expectations.” 

But Xi vowed in July to “maintain our zero-tolerance attitude towards corruption and look into every case involving corruption, leaving no place to hide for corrupt officials within the party”, according to Xinhua, the state news agency.
Public attention has also been stoked by state media dispatches highlighting monthly statistics on officials who have been disciplined. 

Four out of five Chinese citizens consider official corruption a big problem according to a Pew Research Centre poll this spring, making it of greater concern than pollution and food safety. 

But nearly two-thirds of respondents in the Pew survey said they thought the corruption problem would improve over the next five years.

Xi has provided his own stark vision of the consequences if the party fails to clean itself up. 

“If we cannot manage the party well and govern the party strictly, leaving prominent problems within the party unsettled, our party will sooner or later lose its qualifications to govern and will unavoidably be consigned to history,” he said.