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.”
China has not joined in the sanctions imposed on Russia by the US and its Western allies since 2014.
Beijing’s forces took part in giant Russian war games held earlier this month.
China is fast becoming a manufacturer of sophisticated weaponry in its own right but it remains eager to buy advanced Russian weaponry, especially air defense systems and combat aircraft.
Russia – after years of some reluctance – is now more willing to transfer this sort of weaponry to China.
Moscow has also criticized the sanctions on the Chinese military, warning the US against “playing with fire”.
Deputy Foreign Minister Sergei Ryabkov said in a statement: “It would be good for them to remember there is such a concept as global stability which they are thoughtlessly undermining by whipping up tensions in Russian-American ties.”
US officials have said the sanctions are aimed at Russia, and are not intended to undermine other countries’ defense capabilities and similar action against other countries could be considered.
China’s Equipment Development Department (EDD), which is responsible for improving China’s military technology, and its head, Li Shangfu, are sanctioned for completing “significant transactions” with Russia’s state arms exporter, Rosoboronexport.
The EDD and Li Shangfu have been added to a Blocked Persons List, meaning any assets they hold in the US are frozen and Americans are “generally prohibited” from doing business with them.
Furthermore, the EDD is denied export licenses and excluded from the American financial system.
The US also blacklisted an additional 33 people and entities associated with Russian military and intelligence.
China and the US countries are currently embroiled in an escalating trade war.
President Donald Trump has imposed three waves of tariffs on about 40% of China’s roughly $500 billion of exports to the US and has also threatened further tariffs.
China has responded with tariffs on about $110 billion of US exports. In 2017, China imported about $130 billion of goods from the US.
There have also been some tensions over disputed territory in the South China Sea, which is subject to overlapping claims by six countries.
China has been accused of militarizing the sea to support its vast claims.
The US says it is “committed to a free and open Indo-Pacific” and has sailed warships close to artificial islands built by China to challenge what it sees as Chinese efforts to restrict freedom of navigation in a strategically important area.
The US has hit a dozen Russian and Chinese companies and individuals with sanctions over helping North Korea’s nuclear weapons program.
The move comes after the UN Security Council, including Russia and China, voted for further sanctions against North Korea.
The US Treasury said its actions would “increase pressure” on North Korea, but the move has angered China.
Meanwhile, Secretary of State Rex Tillerson praised North Korea for “a level of restraint” in recent days.
He said: “We have had no missile launches or provocative acts on the part of North Korea since the unanimous adoption of the UN Security Council resolution.”
This, Rex Tillerson said, could pave the way for talks between the two sides “sometime in the near future”.
The US Office of Foreign Assets Control designated 10 companies and six individuals in its sanctions.
Treasury Secretary Steven Mnuchin said: “[The] Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system.”
The action means American individuals and companies are no longer permitted to do business with these companies.
China responded swiftly, calling on the US to “immediately correct its mistake” of punishing its companies.
A series of missile tests by North Korea in recent months – along with its repeated threats to carry out a sixth test of a nuclear device – have increased tensions between Pyongyang and the US.
North Korea has been angered, as it is every year, by scheduled US-South Korea military drills, and threatened to launch missiles near the US island of Guam in the South Pacific.
President Donald Trump, meanwhile, threatened the isolated regime with “fire and fury like the world has never seen”.
In North Korea’s latest propaganda video, released on August 22, an image of President Trump is shown at a cemetery which is apparently meant to be in Guam.
Vice-president Mike Pence is also pictured engulfed in flames.
Rex Tillerson’s comments on August 22 appeared to strike a more conciliatory tone.
The secretary of state said North Korea had not launched any missiles since the UN unilaterally imposed new sanctions, and had “demonstrated some level of restraint that we’ve not seen in the past”.
“We hope that this is the beginning of this signal that we’ve been looking for – that they are ready to restrain their level of tensions, they’re ready to restrain their provocative acts and that perhaps we are seeing our pathway to sometime in the near future having some dialogue,” he said.
However, speaking at UN-backed disarmament conference in Geneva on August 22, a North Korean diplomat insisted that the weapons program was “justifiable and a legitimate option for self-defense”.
He said: “As long as the U.S. hostile policy and nuclear threat remains unchallenged, the DPRK will never place its self-defensive nuclear deterrence on the negotiating table or step back an inch from the path it took to bolster the national nuclear force.”
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