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Human Rights Developments

The Chinese government stepped up its efforts to prevent socioeconomic change from disrupting the political system by tightening controls on freedom of expression and continuing to persecute political and religious dissidents. Business people also faced arbitrary detention and unfair trials. The government intensified repression in Tibet, Xinjiang and Inner Mongolia, made ominous moves in Hong Kong, and responded to criticism of its treatment of orphans by tightening controls on access to the state orphanage system. In a positive development, legal reforms passed by the National People=s Congress in March seemed to herald some modest progress towards due process for criminal suspects. At the same time, international willingness to confront China on human rights issues reached a new low.

A fresh wave of arrests and sentences of the few remaining pro-democracy and human rights activists not already in prison or exile left the dissident movement effectively crushed. On October 30, 1996, Chinese authorities sentenced Wang Dan, the principal student leader of the 1989 Tiananmen Square protests, to eleven years in prison on charges of conspiring to subvert the Chinese government. He was accused of Acolluding@ with other dissidents, including Wei Jingsheng, to form discussion groups and appeal for the rule of law, criticizing the government in articles published abroad, accepting a scholarship at the University of California for self-study in Beijing, forming a mutual aid group with other dissidents, and accepting financial help from abroad. No foreign press or observers were permitted inside the courtroom.

Ten months earlier, in December 1995, the country's most prominent dissident, Wei Jingsheng, was finally brought to trial after more than eighteen months in incommunicado detention and sentenced to an additional fourteen years in prison on the political charge of "counterrevolution.@ In January 1996, he was sent to Jile Prison in Hebei, and in July, news surfaced that hardened criminals had been moved into his cell to provide round-the-clock surveillance. Denied fresh air and exercise, Wei was also refused proper medical treatment for a range of ailments contracted during his previous imprisonment.

A second Tiananmen Square leader, Guo Haifeng, reportedly was sentenced in September to seven years in prison for Ahooliganism@ for helping a third dissident escape to the United States. He served a previous four-year term. Liu Xiaobo, a literary critic who helped negotiate the withdrawal of students from Tiananmen Square on June 3-4, 1989, was seized on October 7, 1996 and administratively sentenced the next day to three years in a reeducation through labor camp. On September 30, he and dissident Wang Xizhe issued a statement calling for the impeachment of President Jiang Zemin and for meetings with the Dalai Lama over the issue of Tibet=s autonomy. Wang, fearing imminent arrest, immediately fled China. The government not only accused him of illegally crossing the Chinese border, but threatened to punish all who assisted in the escape.

Veteran labor rights activist Liu Nianchun was Adisappeared@ in May 1995 for over a year only to resurface on July 4 when he received a three-year sentence of reeducation through labor over and above time in detention. Liu was sent to a remote prison camp in northeast China.

Other 1989 activists remained in limbo. Li Hai, a graduate philosophy student who spent a year in prison after June 1989, co-sponsored the 1993 "Peace Charter,@ then was arrested again in May 1995, was tried in camera on May 21, 1996 on charges of "leaking state secrets." As of November, he had not been sentenced. In September, Zhang Zongai, a former elected member of the Xi'an People's Congress who had spent five years in jail for denouncing the government crackdown on the 1989 pro-democracy movement, was tried on charges of "counterrevolutionary propaganda and incitement" for having written letters seeking guidance from the Taiwan news media on how to bring democracy to China; secondary charges against Zhang included communicating his political views by letter to a friend in the U.S. and conducting an interview with Wang Dan prior to the latter's renewed detention.

Xiao Biguang, a Beijing academic involved in the unofficial labor and church movements, was in detention for over two years before being given the maximum three-year administrative labor reeducation term in 1996. Among others who received administrative sentences during the year were Yao Zhenxiang, a long-time financier of Shanghai's dissident movement who fled to France in 1994 but was arrested soon after voluntarily returning to China in early 1996 having obtained official pledges for his safety; Tan Zihua, a Shanghai resident active during the Democracy Wall period (1979-81); and Chen Longde, a leading human rights activist from Hangzhou who had signed an open letter to the government in May calling for reevaluation of the 1989 pro-democracy movement.

Several political prisoners Afreed@ after serving their sentences in full were subjected to a variety of post-release restrictions and harassment. Chen Ziming, originally sentenced in 1991 to a thirteen-year term as a Ablack hand@ of the 1989 pro-democracy movement, was released on medical parole for the second time on October 6, 1996. Parole conditions are stringent. Chen cannot step outside his door, use a telephone, meet with anyone except family members, or publish. Access to medical treatment for his testicualr cancer, heart problems and high blood pressure must be negotiated through security officers. Chen=s first parole came in May 1994, but was revoked on June 25, 1995, after he took part in a petition drive which asked that China tolerate peaceful political dissent.

Bao Tong, the most senior government official imprisoned after the Tiananmen Square crackdown, was released in May after serving his entire seven-year sentence, but instead of being allowed to return home, he was immediately transferred to the custody of a high-security government compound in the western suburbs of Beijing, where he continued to be held as of October, denied all access to the outside world apart from limited visits by members of his immediate family. His health continued to be a major concern, but access to medical care was restricted.

Torture of China's detainees and prisoners continued, as exemplified by Chen Longde's case. In 1996, one month after his conviction without trial, Chen leapt from a two-story prison walkway in an attempt to avoid repeated beatings and electric shocks from a senior prison

official as punishment for his refusal to write a statement of guilt and self-criticism.

Police seized Wang Hui, wife of jailed labor activist Zhou Guoqiang, on May 15 and held her for more than a month. As a result of her treatment, including deliberate withholding of liquids, she tried to commit suicide by hanging. After the police cut her down, she was punished with a severe beating. No reason for Wang Hui=s detention was ever given, but she had been active in pressing her husband=s suit against the government. On September 22 she was detained again for unknown reasons.

Medical treatment continued to be denied to political and religious prisoners. Chen Ziming, for example, sentenced in 1991 to a thirteen-year term as a Ablack hand@ of the 1989 pro-democracy movement, was believed to be extremely ill with testicular cancer. The Chinese government rejected quiet diplomatic interventions by foreign governments on his behalf.

Business executives and others involved in trade and finance were also at risk in 1996. Hong Yang, an official of the People's Bank of China who had been assigned to work at the Washington D.C. headquarters of the International Monetary Fund, was lured back to China as part of an IMF delegation in December 1995, tried in June for alleged corruption, and sentenced to eleven years, then retried after enormous pressure from the IMF and given a reduced sentence of five yearsCproving that sustained pressure in individual cases can be effective.

Xiu Yichun, a senior Chinese manager for Shell, and one of her counterparts at the China National Offshore Oil Corporation were detained in early February on charges of obtaining state secrets related to the financing and environmental aspects of Royal Dutch Shell=s plans to build an oil refinery in Huizhou, east of Hong Kong. CNOOC was to be Shell's joint venture partner, and the arrests came shortly before Chinese Premier Li Peng was to visit the Netherlands to discuss the project. As of late March, neither family members nor colleagues had been allowed access to Xiu Yichun; as of August, Shell officials had not been able to obtain any additional information. Motivation for the arrests was unclear but may have reflected official concern that Chinese nationals working for foreign firms would use knowledge of local business practices to violate the law.

All labor rights activism outside the confines of the official All-China Federation of Trade Unions remained a major focus of government repression. A 1996 circular cautioned cadres against illegal unions and Aanti-government and Aanti-socialist@ tendencies lurking in state-owned enterprises. Police statistics showed that more than 12,000 strikes, rallies and other forms of industrial action took place nationwide during 1995. In January 1996 Zheng Shaoqing and Chen Rongyan each received two-year labor reeducation sentences for organizing a half-day taxi strike in the southern city of Zhuhai early in the month; six others received one-and-a-half year terms; and the licenses of all those who took part were confiscated. The fate of most unofficial labor organizers in China generally remains unknown.

Government moves to restrict freedom of expression and access to information also took place, notably in the form of sweeping new regulations curtailing public access to the Internet; controls on foreign economic news services operating in China; and an insistence by Chinese leaders that the domestic press should report only "good news," avoid disclosing details of the widespread social unrest, and reflect the position of the government and the Communist Party.

The Internet controls, inaugurated by a draft set of rules issued by the State Council in January, required existing computer networks linked to the Internet to "liquidate" and "re-register" with the authorities and to use only those international linkage services provided by specified government departments. All subscribers were ordered to provide a written guarantee that they would not use the Internet for purposes "harmful to the state. This goal was further realized in September, when the government deployed sophisticated technology to block subscriber access to as many as one hundred English and Chinese sites on the World Wide Web, including the Washington Post, Economist, Wall Street Journal, CNN, and Time magazine; the Voice of America=s Chinese service and, Hong Kong's Democratic Party; a home page of the Tibetan government-in-exile; and overseas dissident sites.

Chinese student efforts to use the Internet for mass mobilization resulted in a government ban in June and July on public protests against the erection by Japanese ultra-right groups of a lighthouse on the disputed Diaoyu Islands, sovereignty over which is claimed by both China and Japan.

In its response to common crime, the government was indiscriminate. A massive, nationwide offensive on crime known as the "Strike Hard" campaign, the largest since the first such campaign in 1983, was launched in April. In the first six months of the campaign, hundreds of thousands of suspected criminals were arrested, tens of thousands sentenced, and at least 1,500 executed. In one reported case, in Shenzhen in September, the condemned person was executed in full view of several hundred onlookers, despite a longstanding law banning public executions. With its stress on "rapid arrests and rapid sentencing" (summary judicial procedures and government-set targets for the desired number of arrests by public security officials), the anti-crime campaign implied a high incidence of forced confessions, false convictions and wrongful executions. For the first time since 1983, the government extended the campaign to political, religious and ethnic Asplittists and separatists.@ In September, despite officially published evidence that the draconian policy had failed to curb a steadily rising crime rate, the government announced that "Strike Hard" would henceforth be a permanent feature of China's law enforcement scene.

In the Tibetan Autonomous Region and Tibetan areas of Qinghai, Yunnan, Gansu, and Sichuan, the effects of a July 1994 policy conference on Tibet combined with the AStrike Hard@ campaign produced more arrests of suspected independence supporters, a stepped-up campaign to discredit the Dalai Lama as a religious leader, crackdowns in rural areas as well as towns, a major push for ridding monasteries and nunneries of nationalist sympathizers, and the closure of those that were politically active. Monks who refused to sign pledges denouncing the Dalai Lama or to accept a five-point declaration of opposition to the pro-independence movement, faced expulsion from their monasteries.

In May, a ban on the possession and display of Dalai Lama photographs led to a bloody confrontation at Ganden and to searches of hotels, restaurants, shops, and some private homes. Over ninety monks were arrested; fifty-three remained in detention as of October despite Chinese official reports that none of the sixty-one arrested were still being held. At least one person and perhaps two others are known to have died in the melee.

Chinese authorities acknowledged that they are holding Gendun Choekyi Nyima, the child recognized by the Dalai Lama but rejected by Chinese authorities as the reincarnation of the Panchen Lama, Aunder the protection of the government at the request of his parents." Chadrel Rimpoche, the abbot in charge of the original search team, officially labeled a criminal and a Ascum of Buddhism,@ has been missing along with his assistant, Champa Chungla, since

November 4, 1995.

Security forces in Tibet used forms of torture which leave no marks against those suspected of major pro-independence activism. These activists were subject to recurrent Adisappearance@ during which they were subjected to extremes of temperature, deprivation of food and water, applications of electricity, and forcibly injected drugs. Those caught torturing often escaped with mild censure. A court in Shigatse in Tibet gave a county police chief a suspended jail sentence after convicting him of torturing a suspect. He reportedly told the woman, who spent sixty-five days in the hospital as a result of her injuries, AI am the government policy here. It=s no use reporting this to anyone.@

The Chinese government also tightened controls in two other autonomous regions, Inner Mongolia and Xinjiang. In December 1995, at least ten intellectuals who had formed a group called the Southern Mongolian Democratic Alliance were arrested, and police broke up peaceful protest demonstrations in support of the alliance. In June the region's Communist Party secretary called for an attack on "splittist" forces which, he said, were trying with Western backing to destroy China's unity. In Xinjiang, the nationwide anti-crime campaign was extended to include a wholesale police and army roundup of alleged Uighur separatists, some of whom were later executed. Underground religious groups were targeted for closure, and all publishing units were forbidden to publish products whose Acontents violate party or government policies....@ Access to Xinjiang was denied to foreign journalists.

Unofficial Christian and Catholic communities were targeted by the government during 1996. A renewed campaign aimed at forcing all churches to register or face dissolution, resulted in beating and harassment of congregants, closure of churches, and numerous arrests, fines, and sentences. In Shanghai, for example, more than 300 house churches or meeting points were closed down by the security authorities in April alone.

From January through May, teams of officials fanned out through northern Hebei, a Catholic stronghold, to register churches and clergy and to prevent attendance at a major Marian shrine. Public security officers arrested clergy and lay Catholics alike, forced others to remain in their villages, avoid foreigners, refrain from preaching, and report to the police anywhere from one to eight times daily. In some villages, officials confiscated all religious medals. In others, churches and prayer houses were torn down or converted to lay use.

Government statements and policies toward Hong Kong did not bode well for civil liberties after the transition to Chinese sovereignty on July 1, 1997. Its decision to prevent elected members of the Legislative Council from serving their full terms and instead to install an appointed "provisional legislature" to rule the territory for the initial year was one disturbing development. In June, China's top official on Hong Kong affairs said that demonstrations in Hong Kong advocating the overthrow of Chinese rule or independence from China would be banned after July 1997. He had earlier indicated that the Hong Kong press would be subject to vaguely defined but potentially sweeping restrictions including bans on any articles relating to Taiwan or Tibetan independence.

The Chinese government reacted to international publicity about conditions in state orphanages, exposed in a report by Human Rights Watch in January, by closing off access to many of the institutions to anyone not directly employed there, foreign or Chinese. It also responded to evidence of abuse of children in the Shanghai Children=s Welfare Institute by detaining and harassing Chinese citizens involved in earlier attempts to investigate the problem.

The one area in which significant advances in human rights protection were made by the government during 1996 was that of legal reform, with the passage in March of a revised criminal procedure law and an administrative punishment law. The former law, among other things, provided for improved access by detained criminal suspects to legal counsel and made progress toward acknowledging the presumption of innocence. The latter, in theory, restricted police authority to sentence suspects without trial to long periods of administrative detention or to hold suspects in Ainvestigative detention@ without recourse to any judicial process. Other legislative revisions, however, increased by a month the maximum time-limit a detainee could be held without being formally arrested.

The Right to Monitor

While some legal aid clinics were operating at universities that allowed de facto monitoring of and action in support of human rights, no organizations that identified themselves as human rights organizations per se were permitted to function. Legal scholars could and did address problems in the criminal justice system, but anyone who spoke out on behalf of political prisoners or gave information on human right abuses to outsiders, including foreign journalists, risked arrest.

The Role of the International Community

The Chinese government=s continued linkage between trade and human rights -- threatening to restrict trade or foreign investment in retaliation for human rights criticism -- paid major dividends in 1996. Human rights fell nearly to the bottom of the international agenda as Beijing defeated a half-hearted effort led by the European Union (EU) and the U.S. to pass a resolution at the U.N. Human Rights Commission. China=s leaders traveled to various European capitals, and to Bangkok for the first E.U.-Asia summit, encountering little serious human rights criticism. And the Group of Seven (G-7) industrialized countries, at their annual summit in June, disregarded an opportunity to develop a long-term multilateral strategy to promote human rights in China.

The most damaging setback came at the U.N. Human Rights Commission session in Geneva in April, where a resolution criticizing human rights violations in China never even came to a vote. The resolution had been sponsored by the U.S. and the European Union, but the Clinton administration, concerned that it could not gather enough votes to win, was reluctant to lobby governments at the highest levels. Several countries of the EU were more concerned with increasing trade with China than with taking a strong stand in Geneva. The actions of the resolution=s sponsors, even with a last-minute lobbying effort by the U.S., ended up being too little, too late, especially given the massive lobbying effort by China. By a vote in the commission on April 23 of twenty-seven to twenty, with six abstaining, China succeeded in pushing through a Ano action@ motion. A debate or vote on the resolution itself never took place.

No progress whatsover was made on access by humanitarian organizations to Chinese prisons and detention facilities, but the head of the U.N. Working Group on Arbitrary Detention did visit China in July and at the end of the year was trying to negotiate terms of reference for a more in-depth trip to China by the working group in 1997.

UNICEF, after initially saying it would begin a pilot project to help upgrade staff training in some orphanages, by June expressed disappointment at Beijing=s Aexcruciatingly slow@ reforms. Not only was UNICEF denied access to some of the institutions it sought to visit but the U.N. Committee on the Rights of Child, at its meeting in Geneva in June, complained about China=s reluctance to provide infant mortality data.

China submitted reports during the year on its compliance with two international human rights treaties, the Convention on the Rights of the Child and the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment.

European Union

The year began with massive international publicity on the mistreatment of Chinese orphans, sparking a swift response from western governments and international agencies. The European Parliament passed a strong resolution condemning abuses in Chinese orphanages, calling on Beijing to open all child welfare institutions to foreign observers, including UNICEF, and urging the EU to raise the issue during its EU/China Human Rights Dialogue in Beijing in later January, which it did. In addition, Chinese authorities responded to western criticism by taking first journalists, then diplomats on a guided tour of an orphanage in Shanghai. The U.S. State Department also publicly expressed concern about treatment of orphans and withstood a barrage of criticism from adoption agencies and some families of adopted children, concerned that criticism would lead to a decline in foreign adoption (as it turned out, adoptions increased substantially as a result of the publicity).

In January, the General Affairs Council of the EU adopted a long-term policy for relations between the EU and China, stressing economic engagement and a desire to bring China into the World Trade Organization, while addressing human rights and promotion of the rule of law through its political dialogue with Beijing. The European Parliament was due to draft its own response to the new China policy outlined by the European Commission at the end of 1995 and the European Council in 1996.

These developments set the stage for the E.U.-Asia summit on March 1 and 2 in Bangkok, where Chinese Premier Li Peng met with German Chancellor Helmut Kohl and French President Jacques Chirac, aiming to derail a resolution on China and Tibet at the U.N. Human Rights Commission in Geneva. With a US$2.1 billion Airbus sale in the works, and Li Peng set to visit Paris in April to finalize the deal, France was anxious to appease Beijing by backing off from an agreement with the U.S. to cosponsor the Geneva resolution. Germany, meanwhile, was China=s largest trading partner in 1996, with bilateral trade of $18 billion and was also one of Europe=s top investors in the country. Negotiations about possible Chinese concessions on human rights in exchange for dropping the resolution were ultimately futile, but the delay gave China a great advantage in lobbying governments worldwide at the highest levels, offering them trade and support in various U.N. bodies in exchange for their votes to keep the measure off the agenda.

Despite appeals on human rights in China and Tibet signed by over 200 French legislators and scattered protests, Li Peng=s visit to Paris was hailed by Beijing as marking a Awatershed@ in its ties with France, and this was followed in July by a six-nation swing by President Jiang Zemin through Europe and Asia. When a vigorous debate on repression in Tibet erupted in the German parliament in June, and Beijing warned that German business interests in China could suffer, Bonn quickly scrambled to restore good relations. An invitation to German Foreign Minister Klaus Kinkel to visit China was temporarily withdrawn, but in September the invitation was renewed, and during his visit in October, Kinkel raised the cases of Wang Dan and Wei Jingsheng. Germany=s president was expected to go to China in November. At about the same time relations with Bonn were patched up, Australia=s prime minister, John Howard, was also threatened with trade retaliation for planning to meet with the Dalai Lama in Sydney; he proceeded with that meeting anyway.

United States

Human rights clearly took a back seat to commercial and strategic interests in U.S.-China policy throughout the year, as evidenced by the Clinton administration=s announcement in July (presaged in a speech by Secretary of State Warren Christopher in May) that it would embark upon a series of high-level meetings with China aimed at improving Sino-U.S. relations, leading to reciprocal summit visits in Beijing and Washington in 1997 without specific human rights preconditions. The U.S. tacitly agreed to downplay human rights in pursuit of closer cooperation on security matters and other issues. The administration=s 1994 Adelinking@ of trade and human rights was thus taken a step further, and President Clinton abandoned any possibility of using U.S. political or economic leverage with Beijing to exert pressure on human rights.

The shift in political will was particularly apparent in the U.S. agreement with China on copyrights, patents and other intellectual property rights issues reached in mid-June. The administration successfully rallied strong bipartisan Congressional support for use of possible trade sanctions to obtain the agreement, while arguing it would deal with other areas of disagreement such as human rights via Astrategic dialogue.@ The debate on Most-Favored-Nation trading status in Congress focused, in part, on the value of Aengagement@ as the only tool to promote human rights progress but was heavily skewed by business lobbying to do away with the annual MFN renewal process entirely and by the administration=s desire to promote Astable@ relations with Beijing. By a lopsided vote (286 to 141), the U.S. House of Representatives voted on June 17 to support Clinton=s renewal of MFN for another year, which the president proclaimed an endorsement of his overall Aengagement@ strategy. As political cover, the House adopted a nonbinding resolution citing China=s poor human rights record, among other concerns, but mandating no policy changes.

The administration=s engagement strategy produced few, if any, concrete results during the year. No prisoners were released due to U.S. bilateral or multilateral intervention, and any discussions about specific cases were relegated to closed-door meetings. In a meeting with Chinese Foreign Minister Qian Qichen in Jakarta in July, Secretary of State Warren Christopher raised human rights only in a general way, while touting the agreement for a series of high-level visits, including his own trip to Beijing in November (the first since his disastrous visit there in 1994), a prospective visit by Vice-President Al Gore, and a bilateral meeting between Clinton and Jiang at the APEC (Asia Pacific Economic Cooperation) forum in Manila in November. Two weeks earlier, presidential National Security Advisor Anthony Lake went to Beijing and reportedly discussed specific human rights cases, but announced no progress whatsoever, stressing instead the trend toward overall closer relations. Both meetings were also unsuccessful in restarting the formal bilateral human rights Adialogue@ suspended by China in 1994.

Christopher met with Qian again at the U.N. in New York in September; human rights concerns, access to prisoners, Tibet and Hong Kong were discussed.

The State Department did issue public statements about specific political prisoners, for example, protesting the continued detention of Bao Tong following completion of his prison sentence, and urging the release of Fu Guoyong, a democracy activist sentenced in September. The U.S. embassy in Beijing, on the other hand, generally took a noticeably low profile on human rights as the new U.S. ambassador, Jim Sasser, who arrived in Beijing in February, concentrated on promoting U.S. business interests. The embassy did try to send an observer to Wang Dan=s trial.

The administration supported putting China and Hong Kong on the agenda for discussion at the G-7 summit meeting in Lyon, France on June 27, and language for the final statement was apparently agreed upon; but the discussion was later reconfigured to respond to a major bombing in Saudi Arabia, and the China language was also deleted.

Members of the U.S. Congress continued to be outspoken on human rights throughout the year, sending letters to Secretary Christopher prior to his meetings with Chinese officials in Jakarta and New York; raising questions during Congressional hearings; lobbying the administration on policy decisions with human rights implications, such the Export-Import Bank=s decision to provide export credits for the Three Gorges Dam project; called for a full-scale, independent investigation of abuses in Chinese orphanages and for multilateral efforts to ensure U.N. access to them.

On May 30, despite intense lobbying by some corporate interests, the U.S. Export-Import Bank announced it would not provide export credits to U.S. companies involved in the Three Gorges Dam Project. Though the decision was made primarily on environmental grounds, the human rights and social impacts of the project were clearly part of the decision-making process within both the bank and the White House, which had earlier recommended that the bank not fund Three Gorges. In July, the president of the Export-Import Bank, Martin Kamarck, visited China and there were indications that the bank might reconsider its decision if China took certain steps to meet its environmental criteria. Meanwhile, the Export-Import Bank of Japan was due to decide by mid-December 1996 whether it would provide loans to Japanese companies involved in Three Gorges.


In its policy towards China, Japan continued to emphasize nonproliferation and nuclear testing, for the most part downplaying human rights concerns. It did agree to cosponsor the China resolution at the U.N. Human Rights Commission in April and encouraged China to uphold its international commitments in Hong Kong after the latter=s return to Chinese sovereignty on July 1, 1997.

Through its Official Development Assistance (ODA) program, Japan provided China with more than $1.4 billion in aid in Fiscal Year 1996, making it China=s largest bilateral donor. There were no known instances during the year of Japan=s using its aid leverage for human rights improvements in China. Japan pledged its support for China=s entry into the World Trade Organization.

World Bank Assistance

There were no efforts made, by any government, to restrain World Bank funding to China on human rights grounds; its annual lending to China totaled nearly $3 billion for the fiscal year ending June 30. However, a report by Harry Wu in October 1995 that a $125 million World Bank loan for an irrigation project supported forced labor camps in Xinjiang Province led to a World bank investigation and Congressional hearings in July 1996. The bank said it could find no evidence its operations in Xinjiang benefited forced labor camps, though it acknowledged that the chief operator of its projects there, the Xinjiang Production and Construction Corps (XPCC), did administer such camps and was responsible for handling security and military in the province. This caused the U.S. Treasury Department to announce, in Senate hearings, that the U.S. would no longer support bank projects affiliated with XPCC until a clearer division was made between its military and civilian operations.

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