An American geologist jailed for the past 2 1/2 years was sentenced Monday to eight years in prison for stealing state secrets, in a case that underscored how the Chinese government will use the legal system to protect the business interests and competitive edge of its state-run firms. (Washington Post)

Two things to do here: first, a quick look at the case itself; second, a couple of comments on the media coverage.

The Case Against Xue Feng

Xue Feng (AP photo)

Xue was prosecuted for gathering and selling information that was classified as state secrets. Apparently this information included a database containing the locations and details of thousands of petroleum projects owned and operated by State-owned enterprises.

There are several issues that have come up thus far:

1. Was Xue treated fairly during his incarceration and interrogation? He claims to have been beaten and otherwise abused while in custody. As he has no legal recourse at this point with respect to these accusations, I assume that this matter will simply be dropped.

2. Was this database classified as containing state secrets done so before or after Xue obtained it? Any sort of ex post facto classification would be extremely difficult for the government to justify.

3. Was Xue Feng aware of the nature of these documents prior to obtaining them? Generally, lack of knowledge of the law is not a valid excuse for criminal behavior. However, when you are dealing with a law that uses very vague terminology, one would at least expect leniency if ignorance could be proven.

Press Coverage

As usual, the local press has been very quiet on this one. Very few details if any. Today, there was the usual official statement denouncing foreign critics as meddling in the domestic affairs of China. Standard operating procedure for the most part, although it sounds like Foreign Ministry Spokesman Qin Gang got a little frustrated at one point in a press conference, saying that: “Do you think we should release him without any charges and then people will say the judicial system is fair and transparent?” He better not let that happen again or he’ll be out of a job.

The foreign press has indeed been critical of the case and the sentence, but again the details have been very limited.

1. I’ve only read a few articles, but the AP”s article today on Beijing’s rejection of criticism seemed hastily written and not particularly balanced. Here’s a particularly weak bit:

Xue was punished for gathering data on China’s oil industry in violation of vague secrets laws the government uses to restrict business information.

During Xue’s detention that started in November 2007, Chinese state security agents stubbed lit cigarettes on his arms.

I thought that was supposed to be a news article. At least the author could have thrown the word “allegedly” into that last sentence?

2. A lot of press accounts include good discussions of the state secrets law and its use to protect economic information, particularly in the natural resources sector. The vague definition of “state secret” and the use of the law in the recent Rio Tinto/Stern Hu case has also received a lot of attention.

3. The eight-year sentence has been criticized as unduly harsh. I’m not impressed with stories that include quotes from Xue’s defense lawyer (or human rights advocates) to this effect. Why bother getting a reaction quote on the length of the sentence if all you do is use his own lawyer’s statement? I mean, what’s he going to say?

By the way, if you take the eight years and add in the time Xue has been in custody, the time is equal to the sentence given to Rio’s Stern Hu. Substance of the case aside, you can’t say that this sentence is way out of the mainstream.

4. Xue and others say that the information at the center of this case is not usually considered secret in other countries. While there is an issue here about whether or not Xue knew that this data was indeed secret, I am not so thrilled to see press accounts that suggest that just because this isn’t secret in other countries, it shouldn’t be secret here either. None of the articles I’ve read says that explicitly – I’m reading between the lines a bit – but I do get that impression. Seems to me that if China wants to classify that data (even better would be to amend the law to make the definition clear) as secret then that’s its own business.

5. Is this case another (i.e., in addition to Rio) example of China using its state secrets law to protect its energy sector? This seems to be taken for granted in some of the reporting, and for good reason. However, there is a distinction to be made between passing a law that restricts information about key state energy assets, on the one hand, and using that law in an arbitrary or capricious manner to punish competitors or give SOEs a business edge. Some have said that the Rio case, which involved an iron ore supplier in negotiations with Chinese buyers, was an example of a punitive use of the state secrets law. I have yet to read anything that alleges Xue or his employer were specifically targeted for some reason.

As usual, it would be nice to have additional information on this case. One reason for the dearth of specifics is that the U.S. government, working with Xue’s family, kept this relatively quiet until the case was over. Perhaps after the appeal, we will learn more.

Finally, I expect there will be some reporting in the next few days about what “lessons” foreign companies should learn from this case. For the most part, these will be retreads of things written about the Rio case since nothing much has changed since March in this regard. Foreign investors in sensitive sectors need to be extremely careful dealing with this kind of information, particularly when buying/selling it, and when in doubt, they should be conservative and seek professional advice.