China unveils new rules to protect its companies from ‘unfair’ restrictions

By Rahul Vaimal, Associate Editor
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China’s Ministry of Commerce has published new rules for countering “unjustified” laws and restrictions imposed by foreign countries on Chinese companies and citizens, as economic relations between China and US deteriorate.

The rules on “unjustified extra-territorial application of foreign legislation” were posted on the department’s website and established a “working mechanism” to assess the legal implications of such incidents.

According to the notice, a Chinese person or organization that is restricted by foreign legislation from “engaging in normal economic, trade and related activity with a third State or its citizens,” may report it to the commerce department within 30 days.

The commerce department will then assess a case for its potential violation of international law, impact on China’s sovereignty and national security, and impact on Chinese citizens. When a citizen or other organization “suffered significant losses” from non-compliance with foreign legislation, “relevant government departments may provide necessary support”, the notice says. The Chinese government might also enact “necessary counter-measures” in response.

The new rules come amid an ongoing backlash against various Chinese companies from foreign governments, especially the United States.

Last year the US, citing national security concerns, imposed restrictions on Huawei Technologies Co Ltd, a telecom and consumer hardware giant, that deprive it of critical components and threaten to cripple its smartphone business.

Social media giants ByteDance has also been caught in the rift, when last year the Trump Administration attempted to force it to sell the US division of its popular short video app TikTok.

The New York Stock Exchange (NYSE) this week said it will delist three Chinese telecom companies following an order from US President Donald Trump in November barring US persons from investing in publicly traded companies America deems to be tied to the Chinese military. They withdrew from the move later on.

The Trump administration is considering adding tech giants Alibaba and Tencent to a blacklist of firms allegedly owned or controlled by the Chinese military, earlier reports suggested.