China’s Anti-Foreign Sanctions Law has been approved with immediate effect following sanctions from the US, EU.
On June 10, 2021, China’s national legislature, the National People’s Congress (NPC), approved the Anti-Foreign Sanctions Law, with immediate effect. The new law provides legal backing to China’s countermeasures in response to US and EU sanctions over trade, technology, Hong Kong, and Xinjiang.
The law, consisting of 16 articles, stipulates that China has the right to take countermeasures targeting any foreign country, if it “uses various excuses or pursuant to its own laws to contain and suppress China, adopts discriminatory and restrictive measures against Chinese citizens or organizations or interferes in China’s internal affairs.”
Relevant departments of China’s State Council are authorized to include foreign individuals and entities into a countermeasure list if they were involved in the formulation or implementation of “discriminatory and restrictive measures” against Chinese citizens or organizations.
Those on the countermeasure list may be denied entry into China or be expelled from the country. Their assets within China may be seized, distrained, or frozen. Further, they could be prohibited or restricted from doing business and other activities in China.
Besides, China can also take countermeasures against other individuals or organizations with specific ties to blacklisted individuals or entities, such as their families, senior executives or actual controllers of the organization, or organizations that have their senior executives or actual controllers included in the list.
The specific law on foreign sanctions was proposed by Chinese lawmakers and policy advisors earlier this year. As the country strives to combat foreign sanctions, the bill was swiftly approved after three months of reviews.
China has been frequently targeted by foreign sanctions over the last four years since the former US president Donald Trump took office in 2017. His administration sanctioned at least 45 Chinese officials over issues related to Hong Kong and Xinjiang, including 15 vice chairpersons of the NPC Standing Committee.
The incumbent US President Joe Biden has been continuing Trump’s policy of using sanctions against Beijing. In March, the US, EU, Britain, and Canada, imposed sanctions on Chinese officials over alleged forced labor issues in Northwest China’s Xinjiang. In retaliation, China sanctioned back EU citizens and entities, which has put the EU-China Comprehensive Agreement on Investments (“CAI”) in doubt.
Earlier in June, Biden expanded the Trump-era ban on American investment into Chinese firms that have purported ties to the defense or surveillance technology sectors. Huawei and China’s big three telecommunications firms are on this blacklist.
Since the beginning of 2021, the Chinese government has taken multiple corresponding countermeasures against entities and individuals of relevant countries, including the US, the EU, British, and Canadian politicians, companies, and NGOs.
Chris Devonshire-Ellis of Dezan Shira & Associates, who has a 30- year career in China states: “The Western media will make a big issue about this, concentrating on ‘freedom of speech’ comparisons and concerns over censorship and punishments being inflicted on foreigners who step out of line. That is an exaggeration; it will not turn into a witch hunt, although certain individuals who have become China Career Critics may find it harder to gain access in future. I can think of several foreign commentators on China political affairs operating continuously negative political China blogs, websites, and newsletters in countries, such as the United States, that could be impacted. At the end of the day, China just wants respect, not confrontation. Years ago, I was advised when it comes to China: ”Always remember you are a guest in someone else’s house.” Most foreigners in China conduct their business in the country without the need to be reminded of this and will not be affected at all by these new laws. But those who throw stones at the country may find they are not welcomed back.”
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at email@example.com.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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