Former Businessman Warns of Investment Risks in China

[Michael Hull, Former China Investor]:
“She put me to the elevator, and I was physically assaulted on the way”

Michael Hull was visibly upset when he recounted what happened on May 1st this year.

Hull is an American citizen born in Hong Kong. In April, he and a group of former foreign investors had travelled to Shanghai to attend the World Expo. But at his hotel, he was manhandled by Chinese police. He was then taken to a unknown location and interrogated.


After taking down his statements, Shanghai authorities confiscated Hull's passport, and deported him to Hong Kong.

Hull was treated that way because, before travelling to Shanghai, he and his companions had petitioned in Beijing. All of them were once cashed-up investors, who lost everything after being cheated in China.

Since the Chinese regime opened its economy to the rest of the world, many foreign investors have seized the opportunity to cash in. While the move has been worthwhile for some, others have found out the hard way the about the risks involved. 

According to investor advocate, Hong Kong Investment Rights Concern Group, every year thousands of Hong Kong investors are victimized in China. Only a few ever get their disputes resolved.

[Lu Weiping, Hong Kong Investment Rights Concern Group]:
“Usually after a dispute happens, we’ll try and resolved it at the local level, and continue upwards. When none of the local authorities can do anything, we will petition in Beijing, to the highest authorities. Through our many years of petitioning, very few end up having their disputes resolved, probably just half of one percent. Most of the cases are not resolved.”

For Michael Hull, the road to resolving his dispute has taken more than 10 years. After entering into a joint venture with a Chinese state-run company, Hull discovered that his investments – around one million US dollars - were illegally transferred to the Chinese enterprise. When Hull asked local authorities to investigate--

[Michael Hull, Former China Investor]:
“The police said we cannot investigate this case because the manager, Mr. Wu you talked about, he’s a member of the Communist [Party], so we have no right to investigate a member of the Communist Party, we have no right, and you should go to the courts.”

Dr. Gao Weibang, Chairman of the Taiwan-based advocate Victims of Investment in China, says situations like this happen because there's no independent legal system under the Chinese regime.

[Gao Weibang, Chairman, Victims of Investment in China]:
“Because it is a dictatorship, and its police, Procuratorate and courts are all governed by the Political and Legislative Affairs Committee. The three should be independent, but when it’s governed by one entity, how can they be independent? So don’t be mistaken that because a democracy or rule of law exists in our country, that China has an independent Procuratorate or police. That is not the case, because over there, power overrules the law.”

For Hull, power over law proved to be a personal lesson. After being placed under house arrest at his hotel in Shanghai, he witnessed fellow petitioners being assaulted by police.

[Michael Hull, Former China Investor]:
“A Foreigner like me, when we grow up in our country, in America, we always believe that the law is with them, that there’s a law. But this time, when I go to china, I also believed that there were Chinese law protecting every citizen, [and] foreigners in particular. But this time, I can’t see any law, Chinese law, protecting me.”

Hull says while he cannot tell others to stay away from investing in China, he wants potential investors to learn from his experience, and become aware of the risks they are taking on.