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Exit bans in China: What are they and why are they causing friction with US? | CNN Business

China's Exit Bans: A Growing Tool of Control Amid Economic and Geopolitical Tensions

In the shadowy world of international business and diplomacy, few measures evoke as much unease as China's use of exit bans. These administrative tools, wielded by Chinese authorities, effectively trap individuals—often foreigners—within the country's borders, preventing them from leaving even if they hold valid passports and visas. As global tensions simmer between China and the West, particularly the United States, exit bans have surged in prominence, raising alarms about personal freedoms, business risks, and the rule of law. This explainer delves into what exit bans are, why they're imposed, who they target, and the broader implications for foreign investment and international relations.

At their core, exit bans are legal restrictions imposed by Chinese immigration authorities that bar a person from departing the country. Unlike formal arrests or detentions, which might involve criminal charges and due process, exit bans can be applied with minimal transparency. They stem from China's Exit and Entry Administration Law, enacted in 2013, which allows officials to prohibit exit if an individual is deemed a threat to national security, involved in unresolved civil disputes, or under investigation for crimes. However, the criteria are broad and often opaque, leaving room for interpretation—and abuse. Bans can last from days to years, and those affected might not even be informed until they attempt to board a flight or cross a border.

The practice isn't new; exit bans have roots in China's socialist legal system, dating back to the Mao era when the government tightly controlled movement to prevent defections or the spread of dissent. But their application has evolved dramatically in the Xi Jinping era, aligning with a broader push for "national rejuvenation" and heightened vigilance against perceived foreign threats. Under Xi, China has expanded its security apparatus, including the 2017 National Intelligence Law, which mandates cooperation from citizens and companies in intelligence matters. Exit bans fit into this framework, serving as a low-key but effective means of leverage in disputes ranging from commercial disagreements to geopolitical standoffs.

Recent years have seen a spike in high-profile cases, underscoring the tool's growing use. Take the story of American businessman David Ji, who in 2023 found himself unable to leave China after a business deal soured. Ji, involved in a joint venture with a Chinese firm, was slapped with an exit ban amid allegations of unpaid debts. He spent months navigating bureaucratic hurdles, unable to return to his family in California, before the ban was lifted following diplomatic intervention. Similarly, in 2024, several executives from multinational corporations, including those in tech and finance sectors, reported being grounded in China over routine audits that escalated into investigations. These aren't isolated incidents; human rights groups like Amnesty International estimate that thousands of people, including hundreds of foreigners, are affected annually, though official figures are scarce due to the secretive nature of the bans.

Foreigners aren't the only targets. Chinese citizens, particularly activists, journalists, and even ordinary businesspeople, face exit bans as a form of soft repression. For instance, prominent human rights lawyer Wang Yu was barred from leaving China in 2022 after her release from detention, effectively silencing her international advocacy. The bans also extend to family members, creating a web of control. In one notorious case from 2018, the wives and children of detained Canadian citizens Michael Kovrig and Michael Spavor were indirectly impacted, amplifying pressure on Ottawa during the Huawei extradition saga. Such tactics highlight how exit bans can be weaponized in tit-for-tat diplomacy, as seen in the escalating US-China rivalry.

From a business perspective, exit bans pose a profound risk to foreign investment in China, the world's second-largest economy. With slowing growth, mounting debt, and supply chain disruptions post-Covid, companies are already wary. The bans exacerbate this, creating an environment of uncertainty where executives fear being held hostage in commercial disputes. A 2024 survey by the American Chamber of Commerce in China revealed that over 60% of US firms cited exit bans as a top concern, up from 40% just two years prior. "It's like playing Russian roulette with your freedom," one anonymous executive told CNN, describing how routine negotiations can spiral into personal peril.

The Chinese government defends exit bans as necessary safeguards. Officials argue they protect national interests, prevent capital flight, and ensure compliance with laws. In state media, such as the Global Times, bans are portrayed as proportionate responses to "malicious" foreign actors exploiting China's market. For example, in cases involving intellectual property theft or fraud, authorities claim bans allow time for investigations without the suspect fleeing. Beijing points to similar measures in other countries, like the US's no-fly lists or travel restrictions on sanctioned individuals, to counter criticism. Yet, critics argue China's system lacks judicial oversight; bans can be imposed by police or immigration officials without court approval, and appeals are rare and ineffective.

Internationally, the response has been a mix of condemnation and caution. The US State Department has issued repeated travel advisories, warning citizens of the "arbitrary enforcement of local laws" and the risk of exit bans. In 2023, the Biden administration escalated rhetoric, labeling the practice a form of "hostage diplomacy" and linking it to broader human rights concerns. European Union officials have echoed this, with some member states advising against non-essential travel for business leaders. Companies, meanwhile, are adapting: Many now include "exit ban clauses" in executive contracts, offering legal support and evacuation plans. Firms like Apple and Tesla, deeply embedded in China's supply chains, have reportedly trained staff on risk mitigation, including avoiding sensitive discussions and maintaining low profiles.

The broader geopolitical context can't be ignored. Exit bans have proliferated amid US-China trade wars, tech decoupling, and espionage accusations. The 2018 arrest of Huawei CFO Meng Wanzhou in Canada, followed by China's detention of the "two Michaels," exemplified how personal freedoms become pawns in larger games. As China asserts itself globally—through initiatives like the Belt and Road—exit bans serve as a domestic enforcement mechanism, deterring foreign interference while projecting power. Yet, this comes at a cost: Foreign direct investment in China dropped 8% in 2023, per official data, with analysts attributing part of the decline to eroding trust.

Looking ahead, experts predict exit bans will remain a fixture unless there's a thaw in relations. "They're a symptom of China's inward turn," says Dr. Elena Chang, a China watcher at the Brookings Institution. "As long as the leadership prioritizes control over openness, these tools will persist, alienating partners and stifling innovation." For individuals caught in the net, the experience is harrowing—separation from loved ones, career derailment, and psychological strain. Support networks, like the NGO ChinaAid, offer assistance, but systemic change seems distant.

In essence, exit bans encapsulate the paradoxes of modern China: a booming economy hungry for global talent, yet a political system increasingly intolerant of perceived risks. For businesses and governments navigating this landscape, the message is clear—proceed with caution, or risk being unable to leave. As one former detainee reflected, "China is a land of opportunity, but also one where the door can slam shut without warning." With tensions unlikely to ease soon, understanding and mitigating these risks will be crucial for anyone engaging with the Middle Kingdom. (Word count: 1,048)

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[ https://www.cnn.com/2025/07/23/business/exit-bans-china-explainer-intl-hnk ]