China enters the sanctions game, officially

Sending a chill through geoeconomics professionals, China National People’s Congress passed the Anti -Foreign Sanctions Law giving legal teeth and government backing for the State Council to impose sanctions against any party who acts against the interest of the Chinese nation, officially ending the era of ad-hoc measures and heralding a period of tough eye for eye actions. 

To put this in perspective, let me briefly trace how the sanctions game originally began. It was none other than Donald Trump who put sanctions into big play. Coming one after the other labyrinthine sanctions regime was uncontrollable and made US bleed. Despite the mounting losses estimated to be close upon 100 Billion US$, America never considered to have a consistent policy of imposing sanctions and evaluating their effect afterwards. Besides US also implored upon EU and allies elsewhere to follow suit.

China’s response was basically ad-hoc and was limited to countermanding sanctions on individuals and entities. For example, when European Union has imposed restrictions aimed at four Chinese officials and one entity believed to be involved in the alleged human rights violations in Uyghur, China retaliated sanctioning five members of European Parliament, Ten individuals and four European entities. These were administrative measures and lacked parliamentary imprimatur as in the case of US Senate in America and European Parliament  in EU which are, unashamedly fully on the page.

Chinese leadership felt this lacunae as an impediment to have level playing field and the matter was discussed at the NPC whereupon the Anti-Foreign Sanctions Act was passed on June 10, 2021. This Act provides necessary legal backing and national guarantees for China acting against any unjustifiable sanctions or restrictions imposed by foreign government or entities.

More to it. This legislation grants the authority to the State Council of China as the administrative organ to impose sanctions on any individual or entities that participates in the formulation and/or implementation of these foreign sanctions against China. The net is cast as widely as so that individuals and entities of any governmental body or private sector firm are trapped. In sum, this piece of legislation parallels the power and authority of the foreign countries that originated sanctions in the first place.

Here are three takeaways:

1.  China is creating her own unique legal space in international trade, finance and investment law and procedures as a counter to the so-called “Rules based international order “of the West

2. The sedate era of cautionary and countervailing response to US-EU combine is over and now China is ready with the capability of countering any mis-adventure by opponents, ushering in full-spectrum response that has economic, political and legal power and the backing of the People’s Republic of China. Evidently, China announces “If you mess with us, we will double down on you in the same way”.

3. At last, China has entered the hallowed council of World Powers as an equal participant in the geoeconomics power play. By signing this piece of legislation, on Friday June 11, 2021 President Xi Jinping has rung the bell: “China has arrived globally as a geoeconomics power house”

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist