The Chinese government has protested the US enactment of sanctions on a number of domestic companies, barring them from doing business with US-based entities for allegedly collaborating with Russia. China’s Ministry of Commerce criticized the move, saying it is a “typical form of long-arm jurisdiction” that harms the rights and interests of these companies.
China opposes enactment of sanctions on domestic companies
The Chinese government has expressed its disagreement with the recent enactment of a series of sanctions against several national companies for alleged collaboration with Russia. The companies, which are mostly in the electronics business, were allegedly used as bridges, buying American technology to deliver to Russia, circumventing sanctions set by the Office of Foreign Assets Control (OFAC) on Russian entities.
A statement from China’s Ministry of Commerce accused the United States of overreaching with this measure. The statement rejected these measures, stating:
It is a typical unilateral sanction and a form of ‘long-arm jurisdiction’ that seriously damages the legitimate rights and interests of companies and affects the security and stability of the global supply chain.
In addition, China made a call to “correct this crime,” saying it will safeguard the rights and interests of Chinese companies.
This is not the first time that Chinese companies have been hit with sanctions for allegedly cooperating with other countries to evade pre-existing sanctions. In March, a group of Chinese companies was designated for collaborating with Iranian companies aiding the Russian war effort.
In addition, another group of Chinese companies was sanctioned for integrating a shadow banking system for Iranian companies.
China, the United States and sanctions
The enactment of these sanctions has some experts concerned about the effects this may have on the US-China bilateral relationship, already affected by developments on the Taiwan issue. For Hank Paulson, former US Treasury Secretary, “the relationship between the US and China is on the brink of the abyss”, and recent government policies are not working to defuse the situation.
In a recent interview in the Financial Times, Paulson discussed the results of these policies, stating:
If the United States goes too far in restricting trade and investment with China, and we go too far beyond what our allies and partners want to do, the result will be to isolate the United States.
President Joe Biden recently also extended a series of sanctions against military and industrial companies in Russia.
What do you think of the latest sanctions decreed against Chinese companies? Tell us in the comment section below.
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