The Chinese parliament on Thursday rushed to pass a law aimed at countering sanctions imposed by foreign governments on Chinese officials’s companies, intensifying its legal battles with the United States and the European Union.
The law was secretly adopted by the Standing Committee of the National People’s Congress after two readings, instead of the usual three. earlier events It was opened in January by the Ministry of Commerce of China. The January “blockade charter” barred Chinese companies and individuals from imposing foreign government sanctions on China.
“These steps signal a further escalation of the China-US legal war,” said Angela Zang, director of the Center for Chinese Law at the University of Hong Kong.
Last week, President Biden updated the rules of the Trump era banning Americans from investing in dozens of Chinese companies. Biden is in the UK for the G7 summit, where he hopes gather US allies against the challenges posed by China և Russia.
“The fact that the law was removed after last week’s law [Biden administration] “The announcement of changes to the securities embargo is in line with China’s recent reciprocal sanctions bill in response to foreign funding,” said Nick Turner, a lawyer with Hong Kong-based Steptoe & Johnson.
The Trump administration also threatened to impose sanctions on companies providing financial services Chinese officials have said they are responsible for Beijing’s crackdown on Hong Kong pro-democracy movement ու Muslim Uyghurs in northwest China’s Xinjiang region.
After that, Hong Kong CEO Kerry Lam complained that the banks in the area did not deal with him, leaving him stuck “Cash” at the seat of his government.
Under China’s new bill, which was issued only after its adoption, Beijing could target individuals and organizations involved in foreign sanctions in retaliation, including the seizure of assets, which could put Chinese investors’ actions in a difficult position.
“If: [the commerce ministry] “If it issues a ban under this law, it would be illegal in China if a subsidiary of a US bank or any company complied with US sanctions,” Turner said.
Beijing has not yet targeted any foreign investors in response to a trade ministry announcement in January. It did not mean any multinational company as “untrustworthy entities”. A threat first raised two years ago if they did something to undermine China’s national interests, such as selling military equipment to Taiwan.
“These regulatory instruments have been adopted with the primary aim of restraining the US government, rather than actually punishing foreign companies,” he said. “It will be expensive for China to accept these countermeasures as they are. ,, would lead to more separation [from the US]”which is not in China’s interests.”
FT has transformed its trade secrets into its daily briefing on the changing face of international trade and globalization.
Register here to understand which countries, companies and technologies are shaping the new global economy.