As Abbott trade mission kicks off, Australians face the perils of doing business in China

Dalian: As the property boom in Dalian first smouldered in the early 1990s, Bao Ying, then a young woman in her late twenties, rubbed shoulders with Wang Jianlin in local municipal offices, filling out paperwork, applying for permits, and waiting for an audience with officials.

“He dressed simply, was low-key, and wouldn’t say much or smile very much,” she recalls.

Wang would go on to become China’s richest man, his Dalian Wanda conglomerate comprising department stores, shopping centres, five-star hotels, yacht companies and movie studios. He is worth an estimated $15 billion.

In contrast, Bao, who has lived in the Sydney suburb of Strathfield since 1995 but only became a naturalised Australian citizen last year, says she has been left knee-deep in debt after allegedly being swindled by her Chinese business partner out of a property venture.

Tony Abbott, who this week is leading Australia’s largest-ever trade mission of more than 600 people as part of his first visit to China as Prime Minister, will likely continue to tout the endless potential of doing business in China even as the list of Australians who have run into trouble on Chinese soil grows.

Du Zuying, Matthew Ng and Charlotte Chou are among the more high-profile cases of successful Australian entrepreneurs who have been stripped of their assets and put behind bars in China, the cases against them flimsy at best.Their plights have been made public only because family members have come forward to seek media attention.

The Department of Foreign Affairs and Trade, in official business briefing documents and its more widely-targeted Smart Traveller website, warns that increased Australian business activity in China has resulted in “higher numbers of commercial disputes in recent years”.

“Australians doing business in China should be aware of the risks and potential for legal consequences,” it says. “If Australian nationals carrying out business in China become involved in a business or civil dispute, they may be prevented from leaving the country until the matter is resolved. This has recently resulted in Australians being restricted from leaving China for extended periods of time, sometimes many years.”

For Bao, this became starkly apparent when she returned to Dalian from Sydney last July to contest the control of her properties, only to find herself being locked up in a detention centre after her former business partner accused her of embezzlement.

“China’s legal system is too corrupt. He took my things, stole it all, and I’m completely innocent. I thought at the time, why am I the one being locked in here?” she says.

Bao tears up as she speaks of the trauma of being crammed into a cell with 26 other detainees, all sharing one toilet. Nights were sleepless because of the heat and lack of space – inmates had to lie on their side, but even then their bodies would be touching “like cakes piled against one another”.

With no evidence against her, Bao was released after nine days in detention. But she has been told that she cannot leave the country until the case against her is resolved. Her passport was taken away for five months.

Her former business partner declined to comment for this story.

Zhao Ying, a glamorous 60-year-old hotelier, is having problems of her own. Having grown bored of mixing in her friendship circles of rich Chinese “socialites and investment migrants”, she left her Sydney waterfront apartment to open a 17-room boutique hotel in her picturesque home town of Tianjin, a half-hour high-speed-train ride from Beijing.

Having spent the past five years lovingly renovating her building, which sits on the site of an old disused hospital, Zhao was told by local authorities late last year that they were compulsorily acquiring the land in the area, to be auctioned off to property developers.

Zhao says the compensation offered by the local government will barely cover the 10 million yuan ($1.73 million) she has spent on renovations, let alone allow her to purchase a similar property at another site. Though completely disillusioned, she counts herself lucky compared to those in the area that are losing their houses. In January, Zhao and other witnesses say a woman in her sixties leapt out of her fourth-floor window as her building was demolished.

Zhao says she was born into a “bad family” in the ruling Communist Party’s eyes. Her maternal grandfather was an officer in the nationalist Kuomingtang which lost the civil war and retreated to Taiwan; while her father’s father was labelled a landlord during a time of bitter class struggle and shot in the head before she was born.

At 17, she was assigned to work at the state-run Chunhe Sporting Goods Factory, where she hauled and sawed steel bars that eventually became the sturdy legs of gymnastics equipment. “Pommel horses, parallel bars ... although I never got to see the finished products,” she says.

She then joined the People’s Liberation Army’s dance troupe, where she performed for the Cambodian King Norodom Sihanouk and other visiting dignitaries, before being offered a partnership in a clothing business that took off and allowed her to spread her business interests into property.

Zhao, who is an Australian permanent resident but retains her Chinese citizenship, first considered migrating to Australia during the political turmoil of the Tiananmen student protests of 1989 but had a simple reason for staying.

“I really love my country,” she says, adding that she has told her 32-year-old son Michael, who is a Macquarie University graduate and who has lived in Sydney since he was 17, to think long and hard before he gives up his Chinese citizenship (China does not allow dual-nationalities).

But her property dispute, and witnessing the brutish episode where the woman leapt to her death, has convinced her to leave China for good.

“I cried all night after I saw that,” she says.

“I have investments and properties in China. And yet this is forcing me out. Forcing me to sell everything I own, take everything and leave for good. A lot of [Chinese] people don’t want to leave their country, but feel they have no choice.”

For Bao Ying, it was only after the fall of Bo Xilai, the former Poliburo member and one-time mayor of Dalian, that she had the confidence to return to China. Her business rivals, she said, had strong connections to Bo, and to return any earlier would have been putting her physical safety at risk. Even still, she only took up Australian citizenship last year, hoping consular protection would act as a form of “insurance”.

"I still have some feelings of patriotism for China," she says. “But I became an Australian citizen not just for the fresh air. I want to enjoy human rights.”

The story As Abbott trade mission kicks off, Australians face the perils of doing business in China first appeared on The Sydney Morning Herald.

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