Authorities in Yiwu say they will take a tough line on foreigners involved in payment disputes

Chinese officials in the southern trading hub of Yiwu have promised to come down hard on foreigners involved in recent payment disputes, a day after two Indian traders were escorted out of the town following a fortnight-long ordeal during which they were held captive by local businessmen.

Chinese traders in Yiwu familiar with the case told The Hindu in interviews that the authorities had recently assured local businesses, in the wake of a series of payment spats with overseas enterprises, that foreigners would be held accountable and not allowed to leave the country until dues were settled or goods recovered.

The assurances came after many local businesses were hit by falling orders from West Asia and Europe in the past year, and following credit problems that crippled thousands of companies in the Zhejiang province, where Yiwu is located.

Two Indian traders were kidnapped by Chinese businessmen on December 14, and they spent the last few days holed up in a Yiwu hotel facing threats to their lives. They stand accused of owing more than 10 million RMB (US$ 1.58 million) in dues to Chinese businessmen.

The traders, however, say the Yemeni owner of their company fled, and they are only employees.

After two weeks of being detained illegally by Chinese businessmen, Deepak Raheja and Shyamsunder Agarwal were escorted away from Yiwu on Wednesday evening and taken by Indian officials to Shanghai, 250 km away. The traders surrendered their travel documents, and are not allowed to leave the country.

Internal injuries

Mr. Raheja and Mr. Agarwal were on Thursday taken to a hospital in Shanghai for examination. They were found to have several internal injuries, informed sources said.

Doctors recommended that they check in for treatment, but both were understood to be short of funds. They were moved from their hotel to an undisclosed location on Thursday evening amid continuing fears for their safety, officials said.

They are likely to stand trial if prosecutors in Yiwu hold them liable for their company's dues, after on-going investigations are completed.

While Chinese businessmen claimed that the two Indians issued statements agreeing that payments were due, Mr. Raheja said the documents were signed under duress.

‘Commercial dispute'

Indian officials said the case was a commercial dispute whose merits were for prosecutors in Yiwu to decide, and not an issue for the Indian government to resolve. They have, however, stressed to Chinese authorities in Beijing and in Yiwu that the two traders' safety must be assured and the rule of law adhered to.

Up until Wednesday, the traders were in effective detention in the Korgan Hotel in Yiwu, which was surrounded by local traders and hired plainclothes toughs who prevented them from leaving and threatened to kidnap them, as The Hindu reported from Yiwu on Wednesday.

The Chinese Foreign Ministry in Beijing questioned this account. Foreign Ministry spokesperson Hong Lei said at a briefing on Thursday the two traders were settled in the hotel and had freedom of movement.

‘No ill-treatment'

Chinese officials have denied that the traders were ill-treated, and have issued stern warnings that traders would be held accountable for evading payments. The authorities in Yiwu have also questioned Indian officials' statements that a diplomat from the Shanghai Consulate, S. Balachandran, was prevented access to food and medicines and fainted during a December 31 court hearing.

A local official accused Mr. Balachandran of “[planning] to take away the two Indians secretly under the pretence of going to the toilet.” “But they were stopped by suppliers at the court's exit,” the unnamed official told the state-run Global Times. “When the officials arrived, they found the diplomat sitting on the ground and claiming that he was beaten up. But physical checks afterwards showed no signs of a beating,” the official claimed.

Indian officials strongly rejected the claims, stressing that Mr. Balachandran was present at the hearing as a consular representative, and that the two traders were moved out of Yiwu only with the full cooperation of the local police.

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