Western Businesses ‘Shocked’ By China’s Abrupt, ‘Potentially Irreconcilable’ Anti-Sanctions Law


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Western business groups said they were “shocked” after China’s government on Thursday passed a law to counter foreign sanctions, describing the move as creating “potentially irreconcilable” problems for foreign companies.

The standing committee of China’s legislature, the National People’s Congress (NPC), passed the law Thursday to resist U.S. and E.U. economic pressure over matters like trade and human rights, Reuters reported. The NPC had stated in its annual work report in March that it aimed to “upgrade our legal toolbox” to address the risks from foreign sanctions.

Foreign individuals and entities involved in making or implementing “discriminatory measures” against Chinese citizens or entities could be placed on an anti-sanctions list by a “relevant department” in China’s government.

Those on the list may be denied entry or face deportation, their assets could be seized or frozen and they could be restricted from doing business in China, according to state-backed news outlet Xinhua.

The counter-sanctions could be equivalent to foreign sanctions, or asymmetric responses. Specific measures will include restrictions on entry and exit, freezing of bank accounts, sanctions against relevant entities and individuals, etc.

— Henry Gao (@henrysgao) June 10, 2021

American Chamber of Commerce chairman Greg Gilligan told Agence France-Presse (AFP) the new law “presents potentially compliance problems for foreign companies.” He cautioned that pushing through such a measure undermines foreign investor confidence in China’s legal system.

European Chamber president Joerg Wuttke told AFP that “European companies in China are shocked by the lack of transparency and speed in this process.” He added that foreign companies will be “very much stuck between a rock and a hard place.”

U.S. and E.U. officials have increasingly sanctioned Chinese officials and entities over concerns about China’s treatment of Uyghur Muslims in Xinjiang and pro-democracy groups in Hong Kong. Chinese companies have also faced punitive measures over trade and technology concerns. (RELATED: ‘Cold War Mentality’: China Slams Bipartisan Bill Bolstering American Competitiveness)

President Joe Biden expanded a Trump-era executive order last week banning U.S. investment into dozens of Chinese companies linked to China’s defense and tech surveillance industries.

However, Chinese foreign ministry spokesman Wang Wenbin said during a press briefing Friday that he did not see a definite link between the new anti-sanctions law and foreign investment. He argued the law actually “provides a predictable legal environment” for foreign companies in China.

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