China has enacted a new set of regulations designed to specifically counter foreign laws and sanctions that apply outside the country in question, such as US sanctions against Chinese companies. The regulation, comprising 20 articles, has been in force since its publication in mid-April.
Specific measures under the regulation
China regards certain extraterritorial measures as a violation of international law. This applies in particular where, in China’s view, they undermine the economic interests, security or rights of Chinese companies and citizens.
With the help of the new regulations, China will be able to take targeted countermeasures in future. At the same time, Chinese companies and individuals are prohibited from implementing such foreign requirements.
Another new feature is a kind of blacklist. Foreign companies or individuals who support such measures may be classified as ‘malicious actors’.
In addition, Chinese companies and citizens will be able to take legal action against such measures with the support of state authorities.
Extraterritorial application of Chinese law
At the same time, this enables China to apply its own laws abroad, provided there is a connection to China. The aim is to fend off foreign pressure (e.g. in the form of sanctions) and to assert its own economic interests worldwide.
Impact on businesses and global strategy
The regulation is part of a long-term strategy. For years, China has been building up a legal framework to protect itself against foreign pressure whilst simultaneously gaining greater global influence.
In doing so, China is primarily responding to US sanctions in the sense of so-called ‘long-arm jurisdiction’. This creates a conflict of interest for businesses, as they must comply with both Western and Chinese law simultaneously.
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China issues rules on countermeasures against foreign states' unlawful extraterritorial jurisdiction
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