China Jails U.S. Geologist for Eight Years for Selling State Oil Secrets

A U.S. geologist was sentenced to eight years in prison by a Chinese court after being convicted of violating the state secrets law by selling a database on the country’s oil industry.

The U.S. said it was “dismayed” by the sentence given to Xue Feng and remains concerned about his rights to due process under Chinese law. Xue was also fined 200,000 yuan ($29,550) yesterday by a Beijing court at a hearing that was attended by U.S. Ambassador to China Jon Huntsman, Richard Buangan, a spokesman for the U.S. Embassy said.

The case highlights China’s use of the law to protect economic information, three months after the jailing of four Rio Tinto Group executives strained relations with Australia. Groups including the U.S.-China Business Council have criticized China’s definition of state secrets as too broad and say lack of transparency is hurting the confidence of foreign investors.

“These cases definitely make international companies worried,” said Nicolas Groffman, a Beijing-based partner at Australian law firm Mallesons Stephen Jaques.

China rejected criticism over the sentencing and said the process was fair.

“Will they say China’s legal system is open and transparent if we release him without any charges?” Qin Gang, a spokesman at the foreign ministry, asked at a press conference today. “I can guarantee that during the trial, all the defendant’s legal rights were guaranteed.

Photographer: Nelson Ching/Bloomberg

U.S. ambassador to China Jon Huntsman. Close

U.S. ambassador to China Jon Huntsman.

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Photographer: Nelson Ching/Bloomberg

U.S. ambassador to China Jon Huntsman.

Legal Changes

China in April passed legal changes aimed at making people, companies and organizations more responsible for protecting state secrets, according to amendments approved by legislators at the time.

State secrets include information that may damage the nation in fields ranging from defense and diplomacy to “national, economic and development projects” and technology. The government also has the power to label anything else a state secret, according to the amendments passed in April.

Three Chinese nationals were sentenced with Xue yesterday. Li Yongbo, a manager at Beijing Licheng Zhongyou Oil Technology Development Co., was sentenced to eight years and fined 200,000 yuan, AP reported, citing Xue’s lawyer Tong Wei. Chen Mengjin and Li Dongxu, who worked at a research institute affiliated with PetroChina Co., were each given 2 1/2 year sentences and fined 50,000 yuan, according to AP.

Rio Tinto Charges

Former Rio Tinto executive Hu, an Australian citizen, was detained in July 2009 with three colleagues. They were initially accused of stealing state secrets, with the accusations later reduced to bribery and infringing commercial secrets.

“These kinds of cases have been linked to international politics as a weapon of retaliation in the Chinese government’s arsenal,” Hank Wang, a Beijing-based lawyer at Garvey Schubert Barer and co-chairman of the legal committee at the American Chamber of Commerce in the People’s Republic of China, said in an e-mail. “As the U.S. and China have reopened talks on human rights issues, this should be included in the agenda.”

China “missed an opportunity” to be transparent and give companies more confidence when the government decided to hold Hu’s and his colleagues’ hearings in secret, then Australian Prime Minister Kevin Rudd said in March.

‘Irresponsible Remarks’

Qin had rejected Rudd’s criticism at the time and said Australia should respect the result of the process and “stop such irresponsible remarks.”

The database that Xue arranged to sell contained detailed information on the state of the Chinese oil industry, AP reported. China’s three biggest oil companies are all state- owned.

China, the world’s fastest-growing major economy, has been dipping into $2.4 trillion of foreign currency reserves to buy stakes in oil and natural-gas fields and has spent at least $21 billion on overseas resources in the past year. China Petrochemical Corp. bought a stake in a Canadian oil sands project for $4.65 billion in April.

Since his detention, Xue has appeared three times in court before yesterday’s hearing, AP reported. The court also repeatedly postponed sentencing, according to the report.

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