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Illustration: Sarah Grillo/Axios

The Chinese government is threatening to detain foreign citizens unless their home governments do what Beijing demands. In some cases, China has already made good on those threats.

The big picture: This marks a potential evolution of China's "wolf warrior diplomacy" to outright rogue state behavior, putting it in the company of countries like North Korea and Iran, which have also engaged in hostage diplomacy.

Driving the news: Over the summer, Chinese officials told the Trump administration they may detain Americans in China if the Department of Justice prosecutes scholars with ties to China's military, the Wall Street Journal reported last week.

  • The threats began after the FBI interrogated a visiting Chinese military researcher, who then spent weeks sheltering in the Chinese consulate in San Francisco, a story first reported by Axios.

It's no idle threat. In 2018, China detained two Canadian citizens, former diplomat Michael Kovrig and businessman Michael Spavor, just days after Canada arrested Huawei CFO Meng Wanzhou to comply with a U.S. extradition request.

  • The two men have since been charged with espionage-related crimes and held without consular or lawyer visits.
  • Those arrests cast a chill over Canadian citizens living in China as the relationship between China and Canada swiftly deteriorated.

Australia, too, has felt pressure. Earlier this year, Australia led the effort to launch a World Health Organization investigation into the origins of the coronavirus, drawing intense criticism from China, which then imposed trade sanctions on Australia.

  • Then, in early September, Australian diplomats assisted two Australian journalists in leaving China amid concerns Chinese authorities might detain them.

The Chinese government has also detained or even abducted from abroad foreign nationals of Chinese origin, such as the Swedish bookseller Gui Minhai, though Gui's case did not seem intended to pressure the Swedish government.

What the U.S. is saying: “If China wants to be seen as one of the world’s leading nations, it should respect the rule of law and stop taking hostages," John Demers, head of the national security division at the Department of Justice, told the Wall Street Journal.

What China is saying: "By alleging that foreign nationals are arbitrarily detained in China, the United States is acting as the guilty party blaming the innocent," said Chinese Foreign Ministry spokesperson Zhao Lijian in an Oct. 19 press briefing.

The bottom line: China's actions threaten the image it has sought to project to the rest of the world, as a responsible rising power and a less-coercive alternative to the West.

Go deeper

Jan 26, 2021 - World

DOJ considering amnesty for foreign funding disclosure

Photo: Brendan Smialowski/AFP via Getty Images

The Department of Justice is considering an amnesty program that would allow researchers to disclose previous foreign funding without penalty, the Wall Street Journal reports.

Why it matters: The department is facing mounting criticism that its prosecutions of academics who failed to disclose China ties is too harsh.

Jan 26, 2021 - World

Former Google CEO and others call for U.S.-China tech "bifurcation"

Illustration: Aïda Amer/Axios

A new set of proposals by a group of influential D.C. insiders and tech industry practitioners calling for a degree of "bifurcation" in the U.S. and Chinese tech sectors is circulating in the Biden administration. Axios has obtained a copy.

Why it matters: The idea of "decoupling" certain sectors of the U.S. and Chinese economies felt radical three years ago, when Trump's trade war brought the term into common parlance. But now the strategy has growing bipartisan and even industry support.

Fed chair says low interest rates aren't driving stock market prices

Jerome Powell. Photo: ANDREW CABALLERO-REYNOLDS / Getty Images

Federal Reserve chairman Jerome Powell told reporters on Wednesday that rock-bottom interest rates aren't playing a role in driving stock prices higher, while noting that vulnerabilities to the financial system are "moderate."

Why it matters: The statement comes amid unshakeable stock prices and a Reddit-fueled market frenzy — prompting widespread fears of a bubble and the role monetary policy has played in that.