The US and its allies have increasingly sanctioned Chinese officials regarding the Xinjiang and Hong Kong regions, including 14 vice-chairpersons of the NPC’s standing committee.
Washington has also sanctioned Chinese companies such as Huawei and ZTE for violating US sanctions on Iran or North Korea, an act China called “long-arm jurisdiction."
China responded in recent months by imposing sanctions on senior politicians and officials from the US, EU and the United Kingdom.
The commerce ministry in January also presented mechanisms to assess if foreign limits on Chinese trade and business activities were justified, allowing for Chinese individuals or companies to sue for compensation in Chinese courts.
Foreign companies looking to do business in China may now find themselves up against increasing scrutiny from Chinese regulatory authorities regarding their operations both locally and abroad, said Shaun Wu, from Paul Hastings, a law firm in Hong Kong
But China experts say Beijing is simply taking a page from the playbooks of the US and EU, which in recent years have passed various laws to serve as a legal basis for their engagement with China.
“China previously has neither the economic power nor the political will to use legal means to retaliate against US sanctions. It now has both,” said Wang Jiangyu, a law professor at City University of Hong Kong.
“Cooperation is the best option but the US doesn’t want it. So retaliation, such as with this new law, is the second-best option. Sucking it up is the worst,” he said.