Nomura Executive in Japan Banned from Leaving After Traveling to China... "Who Would Dare Do Business in China?"

Cooling of Public Investment Sentiment in Overseas Companies

Chinese authorities have suddenly imposed an exit ban on a senior executive who worked at the Hong Kong branch of Japan's Nomura Bank and visited China. This move comes amid a rapid freeze in overseas capital investment sentiment toward China, following amendments to the counter-espionage law and intensified scrutiny of businesspeople.

On the 24th (local time), major foreign media outlets reported, citing sources, that Chinese authorities issued an exit ban on Charles Wang Zhonghe, head of the investment banking (IB) division at Nomura Bank's Hong Kong branch.

Wang, who resides in Hong Kong, was stranded by this measure after visiting mainland China for travel. According to his social media posts, he shared on the 13th that he was traveling in Qinghai Province in western China. However, foreign media reported that he has not been detained.

The exit ban appears to be related to the case earlier this year involving Bao Fan, chairman of Chinese IB China Renaissance, and Kong Lin, chairman of its subsidiary Huajing Securities, who disappeared while under investigation for corruption. Wang reportedly worked with Kong at the state-owned Industrial and Commercial Bank of China (ICBC) from 2011 to 2016 before joining Nomura Bank in 2018. Kong, who was under investigation for corruption, is currently in custody.

As Chinese authorities launch comprehensive investigations into the financial sector, Wang also seems unable to escape scrutiny. Notably, Wang is not considered a mainland Chinese financier, having worked on Wall Street in the 1990s before moving to Hong Kong in 1996, where he built his career at Merrill Lynch and Deutsche Bank. His current affiliation with a Japanese bank is also seen as a factor likely to attract stringent scrutiny from the authorities.

With China intensifying crackdowns on businesspeople, investment sentiment among foreign companies toward China is rapidly cooling. According to a May survey by the British Chamber of Commerce in China, 70% of British companies are reluctant to make new investments in China due to regulatory uncertainties.

U.S. Commerce Secretary Gina Raimondo also expressed concerns during her visit to China at the end of last month, telling reporters, "I hear from many companies that China has become too risky to invest in." She criticized, "Massive fines without explanation, unclear and shocking amendments to the counter-espionage law, and raids on companies represent a completely new level of challenge."

The U.S. State Department has also warned visitors considering travel to China to reconsider, citing arbitrary law enforcement, exit bans, and unjust detentions imposed by Chinese authorities.

One foreign media outlet predicted, "With investor confidence in China already low, this exit ban on a businessperson will further chill investment sentiment among overseas companies toward China."