China Passes Law to Counter Foreign Sanctions

China Passes Law to Counter Foreign Sanctions

22:43 - Beijing sets mechanisms to retaliate against Western pressure and mitigate sanctions’ impact after an expedited process without public consultation

China enacted a new law aimed at countering foreign sanctions, in response to U.S. and European efforts to pressure Beijing on issues spanning human rights, trade and technology.

Senior members of China’s legislature approved the “anti-foreign-sanctions law” on Thursday, state media said, following an expedited process that skipped public consultation and involved lawmakers reviewing the bill twice instead of the usual three times.

Chinese academics and state media have described the law as a timely addition to Beijing’s legal tool kit for resisting Western coercion, by establishing mechanisms for retaliating against foreign sanctions and mitigating their impact on Chinese entities and individuals.

The law mandates the Chinese government to apply countermeasures against foreign individuals and entities deemed to be pressuring China with “discriminatory restrictions.” The countermeasures include denying and revoking visas or expulsion, seizing and freezing assets within China, blocking transactions and cooperation with Chinese individuals and entities, as well as “other necessary measures” that weren’t specified.

Under the law, which took effect Thursday, Chinese entities and individuals can file lawsuits in Chinese courts to seek compensation for harm caused by foreign sanctions.

The U.S. and other Western governments have ramped up the use of economic and political sanctions against China in the past year or so over what they say are Beijing’s unfair industrial practices, its forced-assimilation campaign targeting Muslim Uyghurs in Xinjiang and the suppression of civil liberties in Hong Kong, among other issues.

Observers say the rapid passage of the new law was the culmination of Mr. Xi’s demands, issued in November, calling for speedier improvements to China’s legal framework for safeguarding its sovereignty, security and interests in dealings with foreign parties.

While the law had been months in the making, state media only disclosed the existence of a draft on Monday, saying the bill was ready for its second reading and final passage this week by the standing committee of the National People’s Congress. Senior lawmakers had reviewed the bill for the first time in April, but this reading wasn’t announced at the time.

Foreign business executives voiced concern over what they see as unusual secrecy. “European companies in China are alarmed by the lack of transparency in this process—the first reading was never announced, and there is no draft to examine,” Joerg Wuttke, president of the European Union Chamber of Commerce in China, said before the law was passed.

“Such action is not conducive to attracting foreign investment or reassuring companies that increasingly feel that they will be used as sacrificial pawns in a game of political chess,” Mr. Wuttke said.

The passage of the new law follows a rash of tit-for-tat sanctions between China and Western governments over the past year or so.

The Trump and Biden administrations have imposed sanctions targeting senior Chinese officials, including members of the Communist Party’s 25-strong Politburo, vice chairpersons of the Chinese legislature’s standing committee and a number of officials involved in Hong Kong policy. The U.K., Canada, and the European Union have also announced similar measures.

Washington has also in the past applied punitive measures against Chinese companies and individuals it accuses of violating U.S. sanctions against North Korea and Iran.

Beijing has denounced such sanctions as interference in China’s internal affairs, and increasingly responded with measures of their own.

For instance, China has banned a number of Trump administration officials from doing business with or entering the country. China’s Foreign Ministry has also announced plans—without providing details—to punish some American defense contractors that participated in U.S. arms sales to the island democracy of Taiwan, which Beijing claims as its territory.

In January, China’s Commerce Ministry published new rules for countering what it called unjustified foreign laws and sanctions that target Chinese companies and citizens, which would, among other steps, allow Chinese businesses to sue in Chinese courts for compensation over losses that result from foreign measures.

Then in March, the National People’s Congress approved plans to improve China’s legal tool kit for countering sanctions, intervention, and “long-arm jurisdiction” from foreign countries, state media said.

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