Foreign Policy: 'The Real Risks of Doing Business in China', Benedict Rogers

At least 5,000 foreigners are in Chinese prisons—many for political reasons.

This June in London, I hosted the first two foreigners to have served time in China’s prisons and gone public about it. There may well be at least 5 million prisoners in China (excluding those in the prison camps of Xinjiang and Tibet), according to former foreign correspondent turned due diligence investigator Peter Humphrey, many of them there for trivial or indeed political reasons, and at least 5,000 are foreigners. As the Biden administration continues a series of visits to Beijing, seeking a diplomatic reconciliation that the Chinese leadership seems to have little interest in, foreign officials should keep the plight of Chinese prisoners in mind.

Humphrey, together with Romanian theologian and teacher Marius Balo, came to London to testify in the British Parliament on forced labor, denial of health care, psychological torture, and mistreatment. Humphrey, who spent 48 years working on China, served two years in China’s prisons on trumped-up charges of “illegally acquiring personal information” of Chinese nationals—as a result of his work as a corporate due diligence investigator—and was denied medical treatment for prostate cancer.

As a result, his cancer was exacerbated, and he fought a life-and-death struggle with the illness for five years after his release. Balo, who served eight years in China’s prisons on false charges of complicity to contract fraud and was released last year, watched at least two fellow foreign prisoners die due to denial of medical care. “The Chinese prison system weaponizes prisoners’ health as an instrument to extort confessions, refusing to provide medical attention to prisoners who refuse to admit guilt,” Humphrey explained.

As the United States seeks to reset its relationship with China, and other democracies wrestle with how to address the challenges posed by Beijing, they must not forget China’s prisoners. Often we think of prisoners of conscience—dissidents, religious practitioners and the millions of Uyghurs and Tibetans in China’s gulags—but Humphrey and Balo are reminding the world that ordinary prisoners detained for alleged crimes are also victims of human rights abuse in China. “In their aggregate,” Humphrey said, “the harsh conditions in China’s pre-trial detention facilities and prisons add up to torture.”

There is simply no access to justice, for a start. “Among the millions of prisoners in the system, not a single prisoner has had a fair and transparent trial. Not a single one,” Humphrey said. “Sentences tend to be reckless, inconsistent, and disproportionate to any offense. So the entire system is arbitrary and subject to the whims of Communist Party officials. The system works in favor of anybody with connections to use the law to bash people they dislike.” Balo agrees. “Justice in China is always based on someone’s whims, the party’s whims, expressed through its foot soldiers,” he said.

During a trial, Humphrey explains, no defense evidence is presented, no evidence contradictory to the prosecution’s is permitted, no defense witnesses are called and no cross-examination of prosecution witnesses is allowed. Indeed, prosecution witnesses are only required to provide written testimonials and are not required to appear in person. In short, Humphrey argues, defense counsels are prevented from conducting any genuine, vigorous defense.

“Police do not conduct investigations with any real detective work or forensic procedures,” Humphrey added. Instead, they rely on extracting confessions from detainees who are “interrogated day by day locked inside a cage” and by extracting “witness statements” that are often coerced. Is it any wonder, he asked, that 99.9 percent of prosecutions result in convictions and sentences, and 99.9 percent of appeals are rejected?

China’s penal system has essentially two principal categories of detention— “administrative” and “judicial”—with three types of jail, excluding the prison camps of Tibet and Xinjiang: detention centers, remand centers, and prisons. Detention centers are run by the police and used for minor crimes, remand centers are used to hold those under investigation (pre-trial detention), while prisons hold those who have been sentenced. But in addition, there are the “black jails” —officially known by the bureaucratic term “residential surveillance at a designated location”—which are secret facilities in which the police behave with impunity and no oversight and into which those detained disappear, are denied legal representation and are cut off from family contact.

In pre-trial detention, Balo was held in a 120-square-foot cage with 10 to 12 other prisoners, none of whom spoke English. He was never allowed out, except for questioning. “I was never tortured physically. Everything was psychological torture,” he said. “I could not contact anyone. I could never see daylight. When I went to court, they shoved a bag over my head.” Each morning, everyone in the cage would wake up at 6 a.m. and be forced to watch cellmates defecate in a hole in the corner, which was the only toilet available. The television above the hole blared out the regime’s propaganda broadcasts.

Both men point not only to the denial of medical care but to systematic forced labor. “China’s entire prison system holding many millions of prisoners is in fact a gigantic, self-perpetuating commercial enterprise, which brings profits to the state, income to prison officers, and funds prison operations,” Humphrey said. “Every prison imposes forced production labor on its prisoners.” In this context, he described, prison officers become “labor supervisors, marketing and sales managers,” and they are paid bonuses for higher output. Contracts with commercial manufacturers are negotiated and won by prison officers.

Prison campuses contain entire factories producing a range of goods for the international markets, ranging from sports shoes, apparel and daily hardware items to electronic products such as keyboards and appliances. Humphrey and Balo both describe watching Chinese inmates marching out to the factories soon after 6 a.m. every day, working 12 hours a day, six days a week and being subjected to writing thought reports and ideological study on the seventh day. “They had to sing ‘the Chinese Communist Party is my mother’ as they marched,” Balo recalled.

Foreign prisoners are generally not required to perform heavy factory labor, but instead undertake manual tasks in a work room in their cell block. This includes making gift bags for retail chains, packaging materials, and packing items such as Christmas cards, plastic tags for retail display racks, keyboards, and breakfast oatmeal sachets. Balo himself packed Christmas cards for the Tesco supermarket chain, and Humphrey witnessed items being produced for brands such as H&M, C&A and 3M.

In recent years, Humphrey has received reports of prison labor production of pregnancy test kits and personal protective equipment. “Chinese prisons make huge profits,” he said. As a consequence, “there is no incentive to release prisoners early. There is every incentive to keep prisoners in prison for as long as possible to squeeze more labor out of them.”

That has implications for companies in the West. Global corporate brands are naive if they believe they can manufacture in China without the risk of forced labor in their supply chains. The United States already has several laws aimed at tackling forced labor and prison labor, including the 2021 Uyghur Forced Labor Prevention Act, which gives authorities the power to block imports of goods suspected of being produced by forced labor.

And while corporate due diligence investigations have always been challenging in China, they have now been made impossible with the introduction of a new anti-espionage law that took effect on July 1. That law protects economic information in a way that could easily result in due diligence being categorized as spying.

Humphrey was jailed because of a due diligence investigation that went wrong. The person he was hired to investigate turned out to be politically well connected, and when she discovered she was the subject of his inquiries, she called the police. Under the new law, instead of facing two years in prison, Humphrey could receive a life sentence for alleged spying if he were still in China. In his view, in these circumstances multinationals cannot satisfactorily check whether a Chinese company is using forced labor or is engaging in other illegal or unethical activities. “The only way to avoid this risk is not to manufacture in China at all,” he said.

If we want to ensure that we are not complicit with forced labor, torture and unjust imprisonment, we need to raise the stakes. Goods made in China should carry a health warning, like cigarettes: “This product may have been made by slave labor.” Mandatory due diligence rules should be imposed on multinational companies investing in China, requiring them to thoroughly and regularly investigate their supply chains. If they are unable to do so due to barriers erected by the Chinese state, they should cease manufacturing in China. Only when the Chinese prison system’s lucrative business profits are threatened will we see the change required.

Doing business in China is always risky. As Humphrey and Balo remind us, the risk includes losing your liberty and potentially your life in a Chinese jail.

This article was published on Foreign Policy on 17 August 2023.