China passed a law Thursday to counter foreign sanctions as it seeks to allay US and EU pressure on trade, technology, Hong Kong and Xinjiang.
However, foreign companies are worried about the declining impact they 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. But details of its contents have not yet been published.
All 14 vice-chairmen of the committee were under US sanctions for passing the National Security Act last year, which critics say has crippled political freedoms in Hong Kong. Beijing says it needs to restore stability in the city. Read more
Last November, President Xi Jinping called on the ruling Communist Party to use legal means to protect China’s sovereignty, security and interests against foreign parties.
The NPC said in its annual working report in March that it wanted to “upgrade our legal system of instruments” to address the risks of foreign sanctions and interference. Read more
In January, the Ministry of Commerce announced mechanisms to assess whether foreign restrictions on Chinese trade and business were justified, and for Chinese citizens or companies to sue a Chinese court. Read more
The United States and its allies are increasingly sanctioning Chinese officials for expressing concern about the way China treats its Muslim Uighur minority in Xinjiang and pro-democracy activities in Hong Kong, sparking Chinese counter-sanctions against U.S. and European police. employees.
Washington has also targeted Chinese companies such as Huawei and ZTE to violate US sanctions against Iran or North Korea, an act called China’s “long-handed jurisdiction.”
The bill went through a secret first reading in April and was passed on Thursday, just two days after the NPC announced it was holding a second reading of the bill. He missed a third reading, usually needed for other accounts.
The European Union Chamber of Commerce said its members were concerned about the lack of transparency regarding the adoption of the bill.
“China seems fast. Such actions do not attract foreign investment or reassure companies that increasingly feel they will be used as sacrificial pawns in a game of political chess,” Jörg Wutke, the chamber’s president, told Reuters.
Foreign companies that want to do business in China may face increasing control by Chinese regulators over their activities both locally and abroad, said Sean Wu of Paul Hastings, a law firm. in Hong Kong
Chinese experts say Beijing is simply taking a page from the game books of the United States and the European Union, which in recent years have adopted various acts to serve as a legal basis for their engagement with China.
“China used to have neither the economic power nor the political will to use legal means to retaliate against US sanctions. Now it has both,” said Wang Jiangyu, a law professor at City University in Hong Kong.
“Cooperation is the best option, but the United States does not want it. So revenge, like the one with this new law, is the second best option. Sucking it is the worst,” he said.
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