China has adopted a new law to counter foreign sanctions, a text that risks putting multinationals in serious geopolitical dilemmas between Beijing and the West.
This new legal arsenal, adopted by the Chinese parliament on Thursday and immediately implemented, comes a week after the Biden administration expanded a blacklist of Chinese companies that Americans are banned from entering. Invest in the name of national security.
China had condemned the initiative and promised to take measures to “defend” its companies.
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The text, which consists of 16 articles, is intended to “protect” any Chinese person or organization in the event that a country “uses”[rait] Various excuses or laws thereof to take “discriminatory” action against them. Neither country has been explicitly named.
But Beijing has long complained about the extra-territorial application of US law through sanctions and trade sanctions.
The new law now legalizes retaliation that can be “suspended, amended or rescinded”, the text specifies. Among them are visas and restrictions on Chinese territory for persons covered by the law, but also for their families.
The text also legitimizes “sealing, confiscation and freezing of goods” of persons or companies that would impose sanctions against China. The law also opens up the possibility of resorting to unspecified “other measures”.
Dilemma for MNCs
Because of the law’s vague wording, “this could potentially affect a large number of people and businesses,” believes Angela Zhang, an expert in Chinese law at the University of Hong Kong.
“It’s a little crazy,” says Julian Koo, a professor of law at Hofstra University in the United States. “Academics, experts and their families, as well as think tanks, risk being sanctioned for supporting sanctions against China,” he warned.
For multinationals caught in the midst of a Beijing-West rivalry, “the impact is likely to be catastrophic”, Angela Zhang warned, however, speculating that Beijing would only use these sanctions “if necessary” but “not immediately”. Will do
Foreign companies may actually be tempted to move their production outside of China, thus accelerating a decoupling that is “contrary to the interests” of Beijing, eager to retain jobs, they believe. is.
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