China is reacting against a flurry of US sanctions with new rules that protect its companies from “unjustified” foreign laws.
Changes announced over the weekend allow Chinese courts to punish companies that comply with such restrictions.
President Donald Trump has continued to target Chinese companies he believes are a threat to US national security.
Measures include punishing companies that supply parts to blacklisted companies.
On January 11, three large Chinese telecoms firms listed on the NYSE are expected to see their shares delisted based on alleged ties with its military.
The NYSE is removing China Mobile, China Telecom and China Unicom Hong Kong, based on an executive order signed by President Trump in November.
The de-listings follow a raft of actions against Chinese firms in recent months including TikTok, Huawei and microchip maker Semiconductor Manufacturing International Corporation (SMIC).
Last week, President Trump signed an executive order banning transactions with eight Chinese apps including popular payments platform Alipay, as well as WeChat Pay.
President Trump claims such tech companies share data with the Chinese government – allegations they have denied.
In a statement on January 9, China’s Ministry of Commerce introduced the new rules on “counteracting unjustified extra-territorial application” of foreign laws.
Bert Hofman, director of the East Asian Institute at the National University of Singapore, explained: “Legal persons that are hurt by the application of foreign legislation can issue legal proceedings in court and claim compensation for the damage done.
“The government can also take other countermeasures.”
The measures, which came into effect immediately, do not mention the US directly, although China has long complained about US sanctions and restrictions on trade.
However, legal experts say it is unclear how the new law will be implemented.
Angela Zhang, a Chinese law professor at the University of Hong Kong, said: “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.”