Canadians doing business in China should be warned of possible trouble, former envoy says

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A former Canadian ambassador to China says Ottawa should issue a prominent and official warning to Canadian business people that commercial disputes in China could result in their being detained and having their passports seized.

David Mulroney, who was this country's envoy to China from 2009 to 2012, says the case of two Canadian wine merchants held captive in Shanghai is a troubling sign of a bigger problem.

He said this should be of particular concern for the Canadian government right now, when Prime Minister Justin Trudeau is expected to soon announce that Canada has agreed to China's request to commence free-trade negotiations. Canada would be the first Group of Seven country to consent to bilateral trade talks with Beijing.

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John Chang, a Richmond, B.C., businessman has been imprisoned in China for more than 20 months over a customs dispute that has been criminalized. His wife, Allison Lu, has had her passport confiscated so she cannot leave China.

Mr. Chang, who is battling cancer while in detention, was celebrated in Canada for his entrepreneurial skills and regularly participated in trade missions to China with Canadian government officials; he even hosted Chinese athletes at his Richmond winery during the 2010 Winter Olympics. He was named an RBC Top 25 Canadian Immigrant award winner in 2015 for his wine business.

Mr. Mulroney said a high-profile warning is required because such incidents are not isolated.

"It's necessary because it's happening. And it's happening to people who were exemplars of everything the Canadian government wants to say about doing business with China. They were part of China trade missions."

The former envoy said the number of cases of detention was growing under his tenure in Beijing. And he said he's worried they will happen more frequently under President Xi Jinping, whose term in office has coincided with a deterioration of human rights and rule of law in China.

The department of Global Affairs currently features one line in its travel advisory for China that says, "Canadian business travellers have been detained and had their passports confiscated as a result of business disputes with their Chinese counterparts."

Mr. Mulroney said this caution is buried too deep in a multipage document and should instead be given prominent placement in advice offered by Canada to its citizens.

"The warning should be 'You may be caught up in a business dispute that morphs into a criminal dispute and you will be imprisoned or your passport will be taken away. And our consular ability to help you will be limited or none,'" the former envoy said.

"This shouldn't be page 11 of a 14-page document. Move it to page 1 or 2."

Mr. Mulroney said incidents of Canadians detained in China over commercial disputes were increasing during his tenure in China but that many of those ensnared in such matters preferred to keep quiet about what happened either because they had relatives in China or wished to keep doing business in that country.

"It's an all-too-common occurrence and it's designed to intimidate the foreign party. … Suddenly a commercial dispute you would willingly fight out in court is now a matter of your own freedom – and it's very hard for people not to crumble under that kind of pressure," the former envoy said.

He noted that these incidents seem to happen particularly to Canadians of Chinese origin. "I don't know why that is – maybe the Chinese feel they could treat these people with impunity."

He said Ottawa is not sufficiently addressing what has happened to Mr. Chang and his wife or the implications for Canadian business.

"If a Canadian business person who has been a poster boy for doing business with China is wrongfully imprisoned that is a very difficult and very real issue," he said.

Perrin Beatty, president of the Canadian Chamber of Commerce, said he does not see a need to issue a more prominent warning for Canadians wanting to do business in China. Anyone who plans to engage with China or Russia should be expected to do their homework on how those countries' legal and business systems operate, he said.

"Most of our members who are dealing in China are pretty sophisticated and they realize there aren't the same protections under the law there as there are here," Mr. Beatty said.

The business lobbyist said the chamber is supportive of Mr. Trudeau's efforts to open formal negotiations with China on a bilateral free-trade deal, but he also warned the talks should be conducted with considerable care and caution.

There are a lot of worries among Canadian business owners that China has blocked off large sectors of its economy from outside investment.

"We think it is positive that the government is engaging with China. It is going to be the largest economy in the world in a matter of just a few years and Canada needs to be there," Mr. Beatty said.