China enacts law to counter foreign sanctions

China enacts law to counter foreign sanctions

The Chinese national flag in Beijing, China, April 29, 2020. REUTERS/Thomas Peter/File Photo

China on Thursday passed a law to curb foreign sanctions as it seeks to ease pressure from the United States and the European Union on trade and technology, Hong Kong and Xinjiang.

Local experts said the new law is China’s newest and broadest legal tool to respond to foreign sanctions and aims to give more legitimacy and predictability to China’s retaliatory measures.

However, foreign companies are concerned about the dampening effect this could have on foreign investment.

State Broadcasting and Television Corporation (CTV) reported that the Standing Committee of the National People’s Congress, China’s top legislature, passed the law on Thursday. But the details of the content have not yet been revealed.

All 14 commission delegates are under US sanctions for passing a national security law last year that critics say crippled political freedoms in Hong Kong. Beijing says it was necessary to restore stability in the city. Read more

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

China’s National People’s Congress said in its annual work report in March that it “want to update our legal toolkit” to counter the risks of sanctions and foreign interference. Read more

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

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The United States and its allies have imposed increased sanctions on Chinese officials over concerns about China’s handling of the Muslim Uyghur minority in Xinjiang and pro-democracy activities in Hong Kong, which has led to counter-sanctions by China against U.S. officials and officials. The United States and the European Union.

Washington has also targeted Chinese companies such as Huawei and ZTE for violating US sanctions against Iran or North Korea, a measure China has called “long-term jurisdiction”.

The bill underwent a secret first reading in April, and passed on Thursday, just two days after the National People’s Congress announced a second reading of the bill. Skips the third reading normally required for other bills.

The European Union Chamber of Commerce said its members are concerned about the lack of transparency around the adoption of the law.

China seems to be in a hurry. “Such a measure does not help attract foreign investment and does not reassure companies that increasingly feel that they will be used as redemptive tools in political chess,” Jörg Woetke, president of the chamber, told Reuters. .

Foreign companies looking to do business in China may face increased scrutiny from Chinese regulators over their operations, both at home and abroad, said Shawn Wu, of Hong Kong law firm Paul Hastings.

Chinese experts say Beijing is simply turning a page out of the playbooks of the United States and the European Union, which have passed various laws in recent years to serve as the legal basis for their engagement with China.

“In the past, China had neither the economic strength nor the political will to use legal means to respond to US sanctions. Now it has both,” said Wang Jiangyu, a law professor at City University of Hong Kong.

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Cooperation is the best option, but the United States does not want it. So revenge, like this new law, is the next best option. “Taking it upon herself is the worst,” he said.

Our Standards: Thomson Reuters Trust Principles.

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