China passes law against foreign sanctions

BEIJING (Reuters) – China on Thursday passed legislation to counter foreign sanctions, as it struggles to resist US and EU pressure on trade, technology, Hong Kong and Xinjiang .

Persons or entities involved in the development or implementation of discriminatory measures against Chinese citizens or entities could be placed on an anti-sanctions list by a relevant department of the Chinese government.

Those on the list may be refused entry to China or be deported from China. Their assets in China can be seized or frozen. They might be prevented from doing business with entities or people in China.

The new law is China’s newest and most extensive legal tool to fight back against foreign sanctions and aims to give Chinese retaliatory measures more legitimacy and predictability, according to local experts.

Foreign companies, however, are concerned about the moderating impact this could have on foreign investment.

China’s highest legislature, the Standing Committee of the National People’s Congress (NPC) passed the law on Thursday, according to state television CCTV.

The committee’s 14 vice-chairs are facing US sanctions for passing the National Security Act last year that critics say crippled political freedoms in Hong Kong. Beijing said it was necessary to restore stability in the city.

President Xi Jinping last November called on the ruling Communist Party to use legal means to defend China’s sovereignty, security and interests against foreign parties.

The AFN said in its annual work report in March that it wanted to upgrade our legal toolkit to deal with the risks of foreign sanctions and interference.

In January, the Commerce Ministry announced mechanisms to assess whether foreign restrictions on Chinese trade and business activities were justified, and for Chinese individuals or companies to file a claim for damages in a Chinese court.

The United States and its allies have increasingly sanctioned Chinese officials for expressing concern over how China is treating its Uyghur Muslim minority in Xinjiang and its pro-democracy activities in Hong Kong, sparking counter-attacks. Chinese sanctions against American and European politicians and officials.

Washington has also targeted Chinese companies such as Huawei and ZTE for violating US sanctions against Iran or North Korea, an act China has called long-armed jurisdiction.

The bill received a secret first reading in April and passed on Thursday, just two days after the NPC announced it was giving the bill a second reading. He skipped a third reading normally necessary for other bills.

The European Union Chamber of Commerce said its members were alarmed at the lack of transparency regarding the passage of the bill.

China seems in a hurry. Such action is not conducive to attracting foreign investment or reassuring companies that increasingly feel they will be used as sacrificial pawns in a political chess game, Joerg Wuttke told Reuters, the president of Chambers.

Foreign companies seeking to do business in China may face increased scrutiny from Chinese regulatory authorities over their operations both locally and abroad, said Shaun Wu, partner at the firm of attorneys Paul Hastings.

Chinese experts say Beijing is simply drawing inspiration from the textbooks of the United States and the European Union, which in recent years have passed various laws to serve as the legal basis for their engagement with China.

China previously had neither the economic power nor the political will to use legal means to retaliate against US sanctions. He now has both, said Wang Jiangyu, a law professor at Hong Kong City University.

Cooperation is the best option, but the United States does not want it. Retaliation, as with this new law, is therefore the second best option. Sucking it is the worst, he said.