China’s new Foreign Affairs Law aims to combat sanctions and foreign interference, but strengthening national security could make it difficult for foreign companies to operate in the country. “There is this potential”, points out Rui Pedro Cunha, president of the Chamber of Commerce of the European Union of Macau. Experts speak of a possible loss of confidence in the Chinese trading environment
Beijing has new legislation to oversee the country’s foreign policy. The new Foreign Relations Law is the latest effort by China to have the legal tools at home that allow it to fight sanctions and other hostilities from foreign forces.
Beijing has been working to “strengthen legislation in the field of foreign affairs” and “use the rule of law to carry out the international struggle”, as Chinese President Xi Jinping said in 2021, at a time when relations with the United States and its allies were deteriorating.
In the last three years, a series of regulations have been implemented to counteract US sanctions, which have been felt in Chinese exports since 2016. One of the laws created for this purpose was that of foreign anti-sanctions, in 2021.
However, this new Law on Foreign Affairs is more complete. According to Wang Jiangyu, professor at the Faculty of Law of the City University of Hong Kong, “it will be like an umbrella law, which governs the Chinese way in all aspects of foreign relations”, quoted the South China Morning Post (SCMP). In his opinion, it indicates that China is in the process of legalizing its diplomatic and relational conduct with foreigners. On the other hand, “it also reflects [Xi Jinping’s] willingness to strengthen national security.”
In an official statement, Wang Yi, director of the Office of the Committee on Foreign Affairs of the Central Committee of the Communist Party of China, said that this law allows “resolutely safeguarding national sovereignty, security and development interests”. The official also mentions that this legal instrument aims to contain sanctions and abuses of power by other jurisdictions.
However, this intention to strengthen national security, while counteracting Western sanctions, can also have repercussions for foreign companies.
Rui Pedro Cunha, president of the European Union Chamber of Commerce in Macau, does not want to issue any alerts yet. To our newspaper, he says that “we will have to wait and see how the various parties will react”. However, he confesses that “this potential exists”, although “it depends a lot on how the Law is interpreted and implemented”.
“The impact will depend mainly on how this law is perceived by the international business community”, noting that “Beijing is getting better and better in the way it communicates these matters”. But he leaves a warning to foreign companies: “In this world of growing uncertainties, one must be prepared for rapid changes in strategy, and know how to adapt to circumstances”.
George Magnus of the Oxford University Center for China indicates that the law could be seen in the West as an aggressive diplomatic measure, thus contributing to the trust deficit between Beijing and the western bloc, led by the United States, says the SCMP .
Henry Gao, professor of Law at the Singapore University of Management, is also quoted by the Hong Kong newspaper as saying that the law could make it difficult for foreign companies to operate in China, as the Communist Party’s efforts are focused on strengthening the internal security. It will “add more uncertainty to the business environment in China as the Party may act based on political views rather than legal considerations”, quotes the SCMP.
Enhanced constitution
The new law covers issues such as global governance, security, judicial cooperation and the protection of Chinese citizens abroad. The law states that China “upholds world peace and security and promotes common global development. In addition to reinforcing the rules governing foreign-related areas, the law stipulates that the State must also “fulfill its obligations in good faith” under the international treaties and agreements in which China participates “in accordance with the Constitution and the laws”.
“The treaties and agreements concluded or concluded by the State must not be in conflict with the Constitution”, it can also be read. The law also provides for the adoption of measures if the nation’s sovereignty, security and development interests are jeopardized by acts that violate international law and the norms of international relations. “It makes the supremacy of the Chinese Constitution very clear, so it is not possible for international law to supersede. This is the first time that this has been clarified very explicitly,” said Wang, quoted by the SCMP.
