China Moves Forward With Law Aimed at Countering U.S. Sanctions

Shipping containers next to gantry cranes at a port in Shanghai. (Photographer: Qilai Shen/Bloomberg)

China Moves Forward With Law Aimed at Countering U.S. Sanctions

Chinese lawmakers are making progress on legislation to retaliate for foreign sanctions amid a growing rivalry with the U.S.

A National People’s Congress committee filed the second draft of legislation aimed at countering sanctions imposed by foreign governments, the official Xinhua News Agency reported late Monday. Xinhua didn’t give details, but said the legislation would provide legal backing for countering “discriminatory measures by a foreign country in accordance with the law.”

The move shows China is following through with a March vow to expand its legal toolkit as it battles the U.S. on a range of fronts, from allegations of human-rights abuses in the western Xinjiang region to limitations on the types of technology China can import.

The Trump administration sanctioned at least 45 Chinese officials over their role in Beijing tightening its grip on Hong Kong and in setting policies for Xinjiang, including 15 members of the NPC. The Chinese government hit back with sanctions of its own, including punishments aimed at Senators Marco Rubio of Florida and Ted Cruz of Texas, but those lacked bite given the dollar’s dominance in international finance.

That spurred China’s ruling Communist Party to seek other ways to get even with foreign governments and firms for what it sees as interference in domestic matters. In January, the Ministry of Commerce issued rules that would allow China’s courts to punish global companies for complying with foreign sanctions, although the ministry provided few details.

“This is about reducing U.S. hegemonic thinking and actions,” Mei Xinyu, part of a research group under the Ministry of Commerce in Beijing, said of the proposed law. “It is also a warning for countries that follow the U.S. in encroaching on China’s rights and a reminder that there is a price to pay for unjustifiable actions toward China.”

Hong Kong Chief Executive Carrie Lam, who was sanctioned by the U.S. alongside other local officials for helping curtail the city’s freedoms, voiced support for the Chinese legislation on Tuesday. “We welcome and support the country’s move to oppose sanctions from foreign governments,” she said in a regular weekly briefing.

Lam previously said foreign sanctions led to difficulty using her credit cards and left her with “piles of cash” at home because she was no longer able to have a bank account.

Chinese Foreign Minister Wang Yi used an address in March to warn U.S. President Joe Biden not to meddle in China’s affairs, and called on the U.S. to end penalties on Chinese firms.

The NPC’s 175-member standing committee is meeting until Thursday in Beijing. The Global Times said it expects the draft law to be put up for a vote soon.

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