Beijing fights back at U.S. blacklists of Chinese companies with new rules

Business & Technology

China issued new rules, with immediate effect, asking Chinese companies not to follow “unjustified” commercial prohibition or restriction from foreign legislation. Though the Ministry of Commerce did not name any country, analysts pointed out that this was China’s legal reaction to the U.S. blacklistings of Chinese companies.

Image via REUTERS/Matthew Childs.

China’s Ministry of Commerce issued new rules on January 9, with immediate effect, to fight back against commercial bans from the U.S., the latest of which is a delisting of China Telecom, China Mobile, China Unicom, and other Chinese companies from U.S. markets, which may or may not take place.

The Chinese Commerce Department now requires companies to report if they find themselves “prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities,” according to the new rules (in Chinese here) ordered by the Ministry of Commerce, titled, “Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures.” 

  • Once the Commerce Department determines that a foreign law or restriction is “unjustified,” the government can issue a prohibition order to prevent Chinese companies from accepting, executing, or complying with this law or restriction. 
  • Companies complying with the prohibited laws or restrictions could be punished. 
  • Moreover, “the Chinese Government may take necessary countermeasures,” the new rules said. 

This order was the Ministry of Commerce’s first order of 2021. It was also China’s first legal reaction to the U.S. blacklistings and pressure on many Chinese companies such as telecom giant Huawei, chipmaker SMIC, three major telecommunication companies, and dozens of companies listed as “Communist Chinese military companies” by the U.S. Department of Defense.