China is back to fighting US sanctions with new laws that protect its firms from “unjustified” foreign laws, actions and sanctions.
The changes announced over the weekend allow Chinese courts to punish companies that comply with those restrictions.
Trump Administration Sanctions
U.S. President Donald Trump has continued to target Chinese companies he believes are a threat to the security of the American state.
The measures even include punishing the domestic companies that supply shares to these blacklisted and barred firms.
On Monday, three major Chinese firms listed on the New York Stock Exchange (NYSE) were expected to see their shares revoked (delisted) on the grounds that they were tied to the military.
The NYSE is removing China Mobile, China Telecom and China Unicom Hong Kong, based on an executive order signed by Mr Trump in November.
The delistings follow a raft of actions against Chinese firms in recent months including TikTok, Huawei and microchip maker Semiconductor Manufacturing International Corporation (SMIC).
Last week, Mr. Trump signed an executive order banning the transaction with eight Chinese apps including the popular payment platform Alipay, as well as WeChat Pay.
The US president says such technology companies are sharing information with the Chinese government – allegations they deny.
China’s Counter Action
In a statement on Saturday, China’s Ministry of Commerce introduced the new rules on “counteracting unjustified extra-territorial application” of foreign laws.
“Legal persons that are hurt by the application of foreign legislation can issue legal proceedings in court and claim compensation for the damage done,” said Bert Hofman, director of the East Asian Institute at the National University of Singapore. “The government can also take other countermeasures.”
The measures, which began immediately, do not directly affect the US, although China has long complained about US sanctions and restrictions on trade.
Expert Opinions
But legal experts say it is unclear how the new law will be implemented.
“One point that remains to be seen is whether the legislation is aimed at sanctions against China in particular or sanctions against third countries, such as Iran or Russia, which have a negative impact on Chinese companies,” Nicholas Turner, a lawyer at Steptoe & Johnson in Hong Kong, told the BBC.
“Companies with key businesses interests in China may need to step up carefully.”
Angela Zhang, a Chinese law professor at the University of Hong Kong, added: “Consider a scenario that a European bank freezes the assets of a Chinese official that was sanctioned by the United States, the Chinese statute will allow the official to sue the European bank to recover his loss.”
Mr Turner believes China is also defending itself against future sanctions that Mr Trump may bring before he leaves the White House later this month.
“I expect more action to be taken before the 20th [January] in line with U.S. Department of State statements, although it remains to be seen whether they will be able to release any new ones in time, given the situation,” he said.
