China’s foreign relations law signals new red lines, but doesn’t say what crosses them

Sweeping legislation concentrates Communist Party’s power over diplomacy, but lack of clarity creates fresh barriers for business, analysts say

Law intended to counter America’s jurisdictional reach adds a ‘sheen of legality’ to Beijing’s actions on world stage, but may have practical limitations

Reading Time:7 minutes

Published: 6:00am, 10 Jul 2023Updated: 6:47am, 10 Jul 2023

With the declaration of sweeping legislation to govern external relations, China appears determined to ramp up a legal struggle to counter sanctions and what it views as other foreign provocations, while seeking to extend the reach of domestic law beyond its borders, according to observers.

The unprecedented Law on Foreign Relations, which went into effect on July 1, also signalled China’s growing resolve to close the gap with the United States on the legal battlefield.

According to Chinese officials and state media, the new law closes “loopholes in the rule of law in foreign related affairs” and provides a legal basis for Beijing’s external “struggle” against “containment, interference, sanctions and sabotage”, as well as America’s “long-arm” jurisdiction.

Along with the Anti-Foreign Sanctions Law enacted in 2021, the new rules are part of Beijing’s response to US-led sanctions that have blacklisted more than 1,300 Chinese companies and officials over alleged wrongdoings – which Beijing has repeatedly denied – including human rights abuses and suspicious ties with Russia.

But the concentration of the Communist Party’s power over diplomacy, the ambiguity of the law, and a lack of clarity about the definition of national security may create fresh barriers and uncertainty for overseas investors and business operations in China, pundits say.

The law was the latest step in China’s general legalisation of national security, military and foreign affairs that began in the mid-2000s and accelerated under Chinese President Xi Jinping, according to Keith Hand, an expert on Chinese law at the University of California’s Hastings College of the Law.

Hand, director of the university’s Centre for East Asian Legal Studies, and a member of the National Committee on US-China Relations, said the new legislation was of “important symbolic significance and signalling functions”, but its practical legal impact was likely to be limited.

“The intent of the law is to burnish China’s international image, signal China’s determination to use domestic law as a tool to address international challenges, and provide a comprehensive legislative framework that links the suite of more specific laws and regulations China has enacted over the past six or seven years,” he said.