Op-Ed Commentary: Chris Devonshire-Ellis
May 30 – The Indian Embassy in Beijing has issued a rare criticism of China and its approach to the rule of law following a recent editorial in the Global Times written by Wu Danhong, an associate professor at China University of Political Science and Law. The Global Times is a mouthpiece for the Chinese government.
Wu’s article deals with problems in the Chinese city of Yiwu, where Indian traders have been detained for the non-payment of monies, and in one instance, an Indian diplomat has been roughed up. Yiwu is popular with Indian traders for its cheap electrical products, however as is often the case in business, occasional disputes have arisen. On several occasions, these have impacted upon Indian nationals by them being held against their will as effective hostages for disputes over alleged debts incurred by other individuals. In one case, debt was apparently owed by a UAE national, yet it was the Indian purchasing managers who were held hostage and held personally liable. There have also been cases of beatings and attempts at extortion from Indian individuals in order to recover monies owed by their employers.
Earlier this year, an Indian diplomat sent by the Indian Consulate in Shanghai was also detained and deprived of much needed diabetic medication when he was sent to Yiwu as part of a mediation process. The case caused a serious diplomatic row between Delhi and Beijing, and the Indian Embassy has subsequently issued travel warnings to Indian nationals against visiting Yiwu.
Wu Danhong’s editorial lambasts the Indian Embassy for issuing a warning to Indian businessmen against travelling to Yiwu, suggesting the Yiwu locals have been slandered and the move puts their businesses at risk. He also places the blame for disputes purely on the Indian buyers and apparently condones the use of force and kidnapping to recover disputed debt.
He writes: “Furious Chinese decided to solve the issue by force. They illegally detained the Indian and took back their goods. Thanks to the help of Chinese authorities, the Indian buyer eventually returned home safely after he handed over the payment to his kidnappers.”
Wu’s text appears a clear contradiction in terms of admitting to illegal detention, kidnapping and use of force, yet at the same time placing the blame on Indian nationals and thanking the Chinese government for the individual’s “release.” India, predictably, is far from amused and has posted a retort on its embassy website. In a highly rare move, the direct reply, terse and to the point, was written by First Secretary of the Indian Embassy in Beijing Vinayak Chavan.
In it, he comments: “I refer to the viewpoint carried on 29 May regarding the Indian Embassy’s trade advisory on Yiwu. It is extraordinary that a professor of law finds “understandable” what he himself describes as solving “the issue by force” that includes “illegal detaining” of Indians. The prevalence of such views and that your newspaper has chosen to print them makes the case for our advisory even more compelling. The professor from Yiwu thinks that “radical actions” are a solution to trade disputes. Others like us expect, perhaps optimistically, the rule of law.”
The case is making headlines in Indian media and outlines again some of the perils of doing business in China. The detention of individuals from any country (let alone Indian nationals) coupled with the use of force should not be an acceptable substitute for legal due process and the use of courts. China would do far better to look at its diplomatic relationships in terms of rule of law and debt recovery mechanisms instead of supporting the Yiwu thugs. Such instances, at a time of global trade shrinkage and uncertainty, merely demonstrate that, in China, the rule of law remains secondary to intimidation. The Indian government is correct in pointing this out, while China may perhaps take heed that bluster and force is not going to win it any friends. International buyers can always go elsewhere.
Update: Chinese police have arrested a Chinese woman named Wang in connection with the illegal detention of an India national, Muhammed Qureshi, who has now returned to India. Qureshi had been picked up and forcibly removed from a local restaurant, where Wang, in conjunction with relatives, detained him in a room at her house. Qureshi was employed as a buyer by an individual known as Faisal. Wang’s dispute with Faisal was apparently over an amount of US$7,900 and was allegedly related to differences that occurred in the RMB-rupee exchange rate between order placing and payment. Qureshi was apparently beaten during his detention, and was eventually found following enquiries from the Indian Embassy as to his whereabouts after he failed to contact his mother and employees in India for several days.
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I have been living in China and India and have been dealing throughout my professional career with diplomats from both nations. It is sad to see Indian-Chinese commercial relationships now become a diplomatic matter. From the outside it is difficult to judge who was responsible for triggering this crisis, but I’m sure that neither the Chinese nor the Indian diplomats enjoy dealing with this current state of affairs.
The particular setting of Yiwu might offer an explanation. Although it is branded as the commodity city of China, it has changed recently. More and more factory owners are handing over their shops in the huge shopping malls to agents. Agents now take over and sell their cheap products to potential customers. This introduction of a middleman not only increases prices, but also drives up frustration levels linked to the usage of a middleman. A fellow countryman of mine who has made his fortune selling products from Yiwu to Germany has left Yiwu because prices are getting too expensive. He has moved his operations away from Yiwu closer to the factories. He is fluent in Chinese and his able to deal with the factory owners directly.
This might not be the case for all buyers, especially for those who come only for a couple of days to Yiwu. They just visit the countless wholesale shops inside the giant shopping malls. Yiwu also offers an “unusual” social life. I’m from Germany and I have travelled a lot in China. However, I have never seen any city in China where you could find so many Indian or Middle Eastern restaurants. Night life is also particular. I failed to find any typical Chinese disco, but instead even the Brazilian Bar had belly dancers from the Middle East and Russian professional dancers. I felt like a stranger in a strange land. All this makes Yiwu a special place, unfortunately also a place of special problems.
The same chinese behaviour is visible in all type of their dealing, whether its politicies, business or streateic and terroretial issues. As all power in China flows from one party rule which is the only source of inspertaiton, ideas and governance in China.
And Law is China? this will be rediculus as law in china is only seriously implemented in areas of controlling Chinese people, low level crimes and maintaing social hernony which can threaten the CPC rule etc.
There is no transperent law and its enforcement in China as it cannot be as there is one party, some set of people who makes laws at the same time they are the main stake holders in economy and well as governance.
Law is always independent from the Rulers.
Olaf, interesting first hand observations about Yiwu. The middle men moving in – and lying about the source of the product “it’s my factory” is what stuffed up the Canton Trade Fair. No wonder buyers get frustrated. Good point.
Girish – you’re spot on. The rule of law should be separate from government, but as we all know in China it’s not and there are structural problems as we can see.
One suspects that like many Chinese Professors, Wu Danhong does not actually have any formal training in law despite his title and position. That generation were largely uneducated and they’re now teaching today’s students, teaching them rubbish. This is our shame.
@Wang Gu – Good point. Certainly Wu’s points seem more steeped in political dogma rather than academic prowress. I think that if the global academic community knew just how many “Professors” at Universities in China actually had no real education in the subjects they teach they’d be shocked. Thanks – Chris