Sunday May 13, 8:22 PM

BEIJING, May 13 (AFP) - China has rejected the appeal of a Chinese- American Falungong member who was convicted of spying for trying to expose the government's incarceration of Falungong members in mental hospitals, a rights group said Sunday.

A Beijing appeals court upheld a lower court's sentence and ordered Teng Chunyan, who went by the pseudonym of Hanna Li, to spend three years in prison on a charge of gathering intelligence, the Hong Kong-based Information Center for Human Rights and Democracy said.

Teng was also ordered to first spend three months in a "study class" where authorities typically try to reform prisoners' thinking. Her family will not be able to visit her until after she is transferred to prison.

The 38-year-old acupuncturist from New York was arrested in May last year after Chinese authorities discovered she had arranged to have photos taken of members of the banned spiritual group detained at a mental hospital and gave the photos to foreign media agencies.

Fifty practitioners from a rural district in Beijing were locked up in the hospital for more than a month to prevent them from going to Tiananmen Square in Beijing to protest the ban on the group.

Teng immigrated to the US several years ago but had not become a US citizen, which made it difficult for the US government to demand her release.

She was sentenced in December following a one-day secret trial on charges of "prying into state intelligence for overseas organisations" at the Beijing Intermediate People's Court.

A Falungong practitioner for about two years, Teng gave up her acupuncture practice on Fifth Avenue in New York to travel to China, to collect evidence of the government's maltreatment of Falungong members.

The center said the court's decision was "absurd," in a statement faxed to Beijing.

The government has never defined what constitutes state intelligence, giving it wide-ranging authority to arrest citizens as well as foreign visitors who obtain information on a large spectrum of topics.

In the past, people have been sentenced to prison for gathering basic information, such as details on workers' protests, peasant unrests or simply mailing newspaper clippings about the arrests of ethnic separatists to people overseas, the center's director Frank Lu said.

"The 21st century is the age of information. Mainland China has more than several tens of million people who need to gather information for business, research, academic studies or reporting. ... This makes people who gather information easily at risk of stepping onto a minefield," Lu said.

In another example, Gao Zhan, a US-based Chinese-American scholar, was arrested this year, also on charges of spying. The charge is believed to be connected to her research on the role of women in China.

China banned the Falungong movement in July 1999 and has launched a massive crackdown which saw leaders jailed for up to 18 years and thousands of followers sent to prison or labor camps.

The court could not be reached for comment on Sunday.