Richard O’Halloran’s return: Averting a China crisis

Richard O'Halloran is home, but the legacy left by his three-year incarceration will linger, raising questions over how a small country such as Ireland can deal with a country such as China in a world where power rules.

“It was like handling quicksilver with a fork,” says businessman Ulick McEvaddy of the long negotiations with the Chinese authorities to get aviation leasing executive O’Halloran home to Dublin.

The saga of his detention of almost three years in China and the eventual lifting of a Chinese exit ban and return to his young family last month has left questions around whether the Government and Department of Foreign Affairs could have done more to get him home earlier, and around how Ireland deals with the world’s rising superpower.

The Government's approach drew criticism from O'Halloran and his wife Tara – and from politicians – on the "quiet diplomacy" used to press China for his release, on the decision of Minister for Foreign Affairs Simon Coveney to thank the Chinese publicly on O'Halloran's case and on the failure not to use the EU delegation in Beijing in a more intensive lobbying effort.

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O’Halloran’s detention over the repatriation of a leased commercial airplane – or the tens of millions of Chinese investor money used to buy it – dropped the Government at a difficult intersection between business, politics and diplomacy as it tried to help a citizen caught up in a complex commercial legal case in an authoritarian country over a deal that was not of his making.

McEvaddy, a veteran of aircraft leasing who went on the board of O’Halloran’s company to help secure his release, put the long negotiation and multiple “false starts” on an agreement down to the Chinese being both “a very proud nation” and “bullies”.

He believes they failed to understand western corporate governance that tied O’Halloran’s hands on the deal they wanted: to break a commercial lease with a Finnish airline and return the aircraft to China.

“The Chinese will learn from this episode because they dragged it out for three years unnecessarily. They should have employed a legal firm in Ireland,” he says.

“We advised them on how robust Irish corporate law is and that there was no danger to the Chinese that the funds would be wiped out by the company.”

‘Constructive debrief’

O’Halloran hopes to meet Coveney face to face for “a constructive debrief” about his experience to create a “playbook” that could help others should they find themselves in a similar situation.

“We had to fight very hard for three years to get any sort of intervention. I just don’t want anyone ever to have to go through that,” Tara O’Halloran told The Irish Times last week.

She feels Irish Government officials "weren't equipped to deal with this situation".

“That definitely needs to be rectified in case it does happen to somebody again,” she says.

Behind the scenes, however, Department of Foreign Affairs officials were working to their own playbook of sorts, learning to deal with China’s so-called “wolf warrior diplomacy” – the assertive style of coercive diplomacy practised under Chinese leader Xi Jinping.

In the decade since Xi took power, the Chinese have used their economic might on the world stage, backed by an aggressive diplomacy that comes down hard on countries that cross them. Former diplomats who spoke to The Irish Times remark on how sensitive the Chinese authorities can be and the importance of not offending them lest they take economic revenge.

"Mention the Uyghurs and these guys go ballistic," says one former diplomat, referring to the mostly Muslim ethnic population oppressed in China's northwestern Xinjiang region.

In a recent sign of how it is willing to flex its economic muscles, China has stopped buying beef, dairy products and beer from Lithuania in a row over the Baltic country's decision to let Taiwan open a de facto embassy in the capital Vilnius.

Size is of little concern to Beijing as relations with larger economic powers such as Germany and Norway have frosted over in the past due to their support for Tibet's exiled spiritual leader, the Dalai Lama.

The fear of alienating the Chinese has grown even more acute in Government circles given the growing importance of trade between the two countries. China is Ireland's fifth-largest market for Irish goods, accounting for €10 billion worth of exports in 2020, most of which were agrifood products. This "enormous economic weight" puts China "very much in the sights of Enterprise Ireland and the IDA and everybody else", says one source.

"Look at who the ambassador in Beijing is: Ann Derwin. She has spent most of her career in the Department of Agriculture," says another source.

The Chinese have to be seen as being strong and forceful leaders, otherwise people will lose confidence in them

Even if pressure could have been applied at ambassador-to-government level in O'Halloran's case, matters were complicated by the fact he was embroiled in complex judicial proceedings in Shanghai officialdom which might not appreciate interventions from above.

“China is not a monolith. Central government is not where you needed to apply the pressure,” says one source.

“There were multiple strands to this: the legal strand, the commercial stand, the consular strand, the political strand: you have to work all the strands but make sure that they don’t end up getting crossed. Doing something productive on one strand might be counter-productive somewhere else.”

Respect, trust and saving face are key to making progress in dealings with the Chinese, say insiders. While the O'Hallorans were understandably frustrated by the advice not to speak out publicly against the Chinese even as Richard's health deteriorated and there was little sign of progress on getting him home, sources familiar with Chinese culture say this was the correct approach.

“Usually you get results by not embarrassing the country,” says a former diplomat.

One Irish business figure who has worked in China says: “The Chinese have to be seen as being strong and forceful leaders, otherwise people will lose confidence in them. The culture doesn’t allow anyone to hold them to task.”

The source describes Coveney’s expression of gratitude to the Chinese in the public statement marking O’Halloran’s release last month as “textbook perfect”.

“He did the right thing – no question. You are giving face to these guys and saying: ‘We appreciate what you have done. You have the power here and you made a decision in our favour.’ Somebody wrote that for him who really understands China,” he says.

Enlisting the EU to help on O'Halloran's case – as Fianna Fáil MEP Barry Andrews argued strongly as O'Halloran was on his way out, was "the last thing you would do", says the source; if they had, the Chinese would have seen the Irish as "weak and insignificant".

“If you cannot negotiate on your own sovereignty, you are in trouble,” says the source.

Sources say Coveney was obliged in his statement to act diplomatically lest another difficult complex consular case involving an Irish citizen in China cross his desk in the future. They acknowledge the sensitivity around cases such as O’Halloran’s and the need to avoid public embarrassment of difficult foreign regimes.

“You may have solved a problem but you are always aware that you may need to make a call to a government minister some months later on something else. If you proclaim your victory, your call won’t be taken,” says one source. In reality, Coveney took one for the team.

Business with China

McEvaddy believes O’Halloran’s case and what it reveals about China’s approach to western corporate and legal practices will make companies, particularly in aircraft leasing, think twice about travelling to China, which he calls “alien territory” for “most western businesses”.

“They are handling things all wrong. You can see the way they dealt with Richard,” he says.

“They held him there for three years when they could have resolved it by simple methods.”

Another source says countries are still figuring out how to work with China.

“Its power in the world is growing,” the source says. “The way in which countries engage with China is a work in progress.”

That goes for Ireland, too. While diplomatic statements are predictably gushing as Ireland seeks to expand markets for agrifoods, Ireland constantly says that it challenges China on its human rights record. Last year, when Simon Coveney travelled to China to meet his Chinese counterpart, Minister Wang Yi, the official statement stressed that Coveney had outlined Ireland's concern "on the treatment of Uyghurs and other minorities in Xinjiang" and the introduction of the National Security Law in Hong Kong, used by Beijing to suppress protests and criticism.

Coveney and his successors have repeatedly stressed in the Dáil – and the Seanad, where international issues are sometimes more keenly debated – that Ireland remains critical of human rights abuses in China and regularly expresses its concerns.

But how hard does Ireland push? Perhaps not too hard sometimes. According to sources with knowledge of some of these meetings, those expressions of concern have sometimes been less than vocal. They are raised with the intention (“blink and you’d miss it” says one source) that the box can be ticked and the Minister can say he has raised them, rather than with any intention or expectation of a serious engagement.

Ireland’s policy

Briefing notes compiled by officials for the incoming minister in 2020 (in the event, Coveney continued in the role) which contain a summary of Ireland’s positions on international issues and diplomacy, firmly locate Ireland’s policy towards China within the broader EU approach.

“Ireland’s relations with China are generally positive,” it summarises, “and closely linked to the EU perspective on China. The EU has shifted to a firmer approach towards China since 2019, when it described China as a partner, competitor and systematic rival for the union. Ireland supports the EU’s approach to dealing with China, which recognises the opportunities for co-operation as well as the challenges in the relationship. We believe that EU unity is key in dealing with issues in our relationship with China.”

But EU relations with China have deteriorated sharply in recent years, with tit-for-tat sanctions related to EU concerns on Chinese human rights abuses, and a stalling of the EU-China trade deal. Lithuania’s acrimonious stand-off with Beijing continues, though other EU countries have large markets there to protect. China buys more German cars than anywhere in the world. In short, the EU’s attitude to China covers quite a range of views.

The Seanad recently held a debate on Taiwan, which heard calls for closer links between Dublin and Taipei. This is something which will certainly annoy Beijing

Within the EU, Ireland is not perceived as being hawkish on China. Irish governments have previously tended to promote trade opportunities, rather than making noises about China’s human rights record. But noises offstage are becoming louder. There is increasing awareness criticism of human rights abuses in Xinjiang, while there is no hiding the brutal suppression of democratic rights in Hong Kong.

The Seanad recently held a debate on Taiwan, which heard calls for closer links between Dublin and Taipei. This is something which will certainly annoy Beijing. The activities of TDs and Senators who promote relations with Taiwan were the subject of an extraordinary letter from the Ceann Comhairle of the Dáil, Seán Ó Fearghaíl, in 2018 which warned parliamentarians that pursuing closer links with Taiwan would directly endanger the Irish national interest by annoying the Chinese government. Senator Michael McDowell, a strong critic of Beijing, cited the letter in the recent Seanad debate.

Ó Fearghaíl's warnings have not had the desired effect. Next week, Senator Malcolm Byrne will host the World Uyghur Congress in a visit to Leinster House. "Ireland has always been a strong supporter of rules-based multilateral global co-operation with a strong emphasis on human rights. An increasingly authoritarian Chinese Communist Party challenges that international perspective," says Byrne. "We have to work with other democracies to defend the rule of law and human rights as common global values."

Even if the Government prefers discrete diplomacy in its dealings with China, in a free society like Ireland the Government writ only goes so far. China may not like that. But it surely understands.