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

CNN

5 days ago

China recently banned a foreign Wells Fargo executive and a United States government employee from leaving its territory, spotlighting its opaque judicial and security system and rekindling concerns over the risks facing foreign companies and nationals operating there.
Exit bans are a common practice employed by the Chinese authorities to prevent individuals under suspicion from leaving the country – sometimes on legitimate grounds, but other times for political reasons, experts said.
The latest bans come as the world's second-largest economy seeks to court foreign investment, and inject fresh uncertainties to ongoing US-China trade talks ahead of an August 12 tariff deadline.
Here's what you need to know about the bans and their implications for bilateral relations with the US.
China's Ministry of Foreign Affairs confirmed on Monday the exit ban imposed on Wells Fargo banker Mao Chenyue, saying she had been 'involved in a criminal case' and is obligated to cooperate with the investigation, without providing further details.
Meanwhile, the US State Department said on Monday that China blocked an employee of the United States Patent and Trademark Office, under the Commerce Department, from leaving the country.
A State Department spokesperson told CNN that it 'has no higher priority than the safety and security of American citizens.'
'We are tracking this case very closely and are engaged with Chinese officials to resolve the situation as quickly as possible,' the spokesperson said.
The New York Times reported, citing a State Department document it obtained, that the Commerce Department employee has been prevented from leaving the country since mid-April, and questioned primarily about his US Army background.
The State Department did not disclose to CNN the identity of the US citizen facing an exit ban.
Asked about the Wells Fargo banker banned from leaving China, the State Department spokesperson said: 'Due to privacy and other considerations, we have no further comment at this time.'
The US Embassy in China said it has raised concerns with Chinese authorities about the 'impact arbitrary exit bans have on our bilateral relations.'
'The Chinese government has, for many years, imposed exit bans on US citizens and other foreign nationals in China, often without a clear and transparent process for resolution,' a spokesperson for the embassy told CNN.
James Zimmerman, a lawyer based in Beijing and former chairman of the American Chamber of Commerce in China, said the government's use of exit bans is 'nothing new,' and they have often been used in investigations to prevent witnesses or suspects viewed as flight risks from leaving China.
'Most of the time, there is a legitimate legal basis for the exit ban, while there are indeed instances of misuse of the process by the government authorities, including for political reasons,' he said.
While there are procedures for having an exit ban lifted, he added, 'the lack of transparency and absence of a workable bail system make lifting an exit ban a time-consuming and challenging process.'
China does not provide numbers of people who are subject to exit bans, though the practice has been employed against its citizens much more frequently than against foreigners. Many human rights lawyers, activists and their families have been placed under such restrictions.
Last year the Dui Hua Foundation, a human rights organization, estimated that more than 30 Americans were under exit bans.
Beyond targeting subjects of criminal investigations, Beijing has imposed exit bans on people who are not directly involved in the legal proceedings.
As early as 2019, the US issued a travel advisory urging Americans to 'exercise increased caution' when traveling to China because of its use of exit bans 'coercively.'
The advisory said the restrictions are used to 'compel US citizens to participate in Chinese government investigations, to lure individuals back to China from abroad, and to aid Chinese authorities in resolving civil disputes in favor of Chinese parties.'
In one notable example in 2018, China blocked Victor and Cynthia Liu, two Americans then aged 19 and 27, from leaving the country in order to pressure their father Liu Changming, a high-profile Chinese fugitive, into returning to China, where he was wanted for financial crimes. Only three years later were they allowed to return home.
Zimmerman also noted that foreigners working with China's state-owned enterprises (SOE) could also be subject to exit bans.
The Central Commission on Discipline Inspection, the ruling Communist Party's top anti-graft agency, has initiated more investigations in recent years, and used exit bans to force foreigners to assist in investigations targeting government officials and SOEs, he said.
'Foreign persons who have had extensive business relationships with SOEs should be cautious, especially if they become aware that the SOEs they had dealings with are a target of investigations,' he said.
China has passed or amended a series of laws in recent years to expand the scope for the use of exit bans, especially on national security grounds.
In 2023, it amended its already extensive counterespionage law, allowing exit bans on Chinese and foreigners under investigation if they are deemed a potential national security risk after leaving the country.
A 2023 report on China's expanding use of exit bans by Safeguard Defenders, a human rights group, estimated at least tens of thousands of people in China are placed under exit bans at any one time. And that does not include millions of Tibetans, or Uyghurs in China's northwestern Xinjiang region, who have long been targeted with ethnicity-based exit bans, mostly through the confiscation and denial of passports, it said.
Other than the counterespionage law amendment, Beijing has in recent years expanded the remit of its national security apparatus through sweeping legislation, giving authorities broader powers to scrutinize foreign nationals and organizations. Some of those laws have ensnared members of the business community.
Just last week, a Beijing court sentenced a Japanese executive for Tokyo-based pharmaceutical firm Astellas Pharma to more than three years in prison for espionage. The executive has been detained in China since 2023.
The Embassy of Japan in Beijing told CNN that the guilty sentence handed down to the Japanese national is 'deeply regrettable,' as the country has urged the Chinese authorities repeatedly to release them, through various channels including at the leader and foreign minister levels.
'The detention of Japanese nationals in China is one of the biggest obstacles to improving people-to-people exchanges and public sentiment between Japan and China,' it said.
An American businessman in Beijing told CNN on condition of anonymity that concerns rise among the foreign business community every time an exit ban or detention of a foreign national is announced, and there are greater concerns for those who travel to China for short-term business trips.
'Denials by the Foreign Ministry of the detentions or lack of clarity as to why the people are detained only makes matters worse. And more importantly, if people are afraid to visit China, investment will fall,' the businessman said.
William Yang, senior analyst at the International Crisis Group, a think tank, noted that companies from countries like Japan, several of whose citizens have been arbitrarily detained by Chinese authorities on espionage grounds, have already reduced the number of staff based in China.
'At a time when China is trying to boost foreign investors' confidence in the country, these developments would be counterproductive to that goal,' he said.
For the first half of 2025, China's Commerce Ministry reported a 15.2% drop in foreign investment in the country, compared with the same period last year, as it continues to grapple with a flurry of economic challenges.
Joe Mazur, senior analyst at Trivium China, a research and advisory firm, said the use of exit bans and the lack of clarity around specific cases will make foreign companies extremely nervous about sending staff to China, damaging overall business confidence.
'A lack of faith in the impartiality and due process afforded by China's legal system tends to overshadow any sort of justification the Chinese side is likely to make about the legal basis for exit bans,' he said.
But Mazur said the development is unlikely to reverse the positive steps the US and China have taken in recent weeks to dial down their trade war.
'Given what's at stake in the US-China trade relationship, I doubt the US will allow these exit ban cases to derail the slight thaw we've seen in US-China ties in the past few weeks,' he said.
Still, Yang believed the bans slapped on the two American citizens cast a shadow over the more positive developments in relations between both countries as they try to arrange a potential leaders' summit and reach a permanent trade deal.
'These cases could make it more complicated for China and the US to negotiate the right terms and conditions for the potential Xi-Trump meeting in China, which the US government seems to be prioritizing,' he said.
CNN's Marc Stewart in Beijing and Matt Egan contributed reporting.