It's not clear how often or how broadly Beijing will use the law. But by complying with U.S. sanctions on China, businesses could face tough sanctions in China as a penalty for doing so.

Transcript

MARY LOUISE KELLY, HOST:

Over the last three years, the U.S. and then the European Union have imposed a series of sanctions on Chinese officials and companies. Now China has created a new legal tool to hit back, and anyone caught implementing these sanctions could find themselves blocked in China. NPR's Emily Feng explains.

EMILY FENG, BYLINE: It's hard to keep track of the round after round of sanctions and counter-sanctions between China and mostly the U.S. Some U.S. sanctions ban Chinese officials and companies because of alleged human rights abuses in Hong Kong and the region of Xinjiang. Others have banned U.S. companies from selling to Chinese ones like Huawei over security concerns. As you can imagine, China has not been happy about this, so it's passed a new law this week, the anti-foreign sanctions law.

HE WEIWEN: Now we have a legal basis that's made in the law. Not only we could make counter-sanctions, but also we must.

FENG: That's He Weiwen, a former Chinese trade official. Under the law, people involved in designing or implementing sanctions against China could find themselves or their family denied a visa to China, or worse, their property in China seized and any commercial transaction they attempt with a Chinese institution blocked.

HE: All the companies, no matter what countries they are from, must abide by the laws in the host country. When they operate in China, they must follow China law.

FENG: The problem for someone like a foreign company operating in China, for example, is there are now two sets of rules they have to follow. If you're headquartered in the U.S. or Europe, you'd have to comply with sanctions against China. But in China, being seen as implementing these sanctions is now illegal. Here's Wei Jianguo, a former commerce vice minister. He now helps direct a prominent foreign ministry think tank in Beijing.

WEI JIANGUO: (Through interpreter) The anti-foreign sanctions law signals that when you have no standing or power to boss people around, then your law in the U.S. will get you nowhere in China.

FENG: It's not clear yet how often China will use this law or how broadly, but that ambiguity has already sent another chill through the foreign business community, which is being required to develop China-specific standards and operations as China creates its own legal landscape.

JAMES ZIMMERMAN: When you mix the law with the politics, you inevitably are going to get the politics.

FENG: James Zimmerman is a partner at the Beijing offices of law firm Perkins Coie.

ZIMMERMAN: We don't want to deal with a lot of the uncertainty, and we need to, you know, operate in an environment that is predictable. If the legal system is subject to the politics, that makes it very, very uncertain.

FENG: Alarmingly, any decision to punish an organization or person under the new law is final, meaning there's no right to appeal in court if you're targeted. And the law is not the only tool China has right now to hit back at sanctions. In January, China's commerce ministry ordered a hotline of sorts to be set up where Chinese companies can report foreign companies for obstructing their, quote, "normal economic activity." Wei, the former commerce official, says China was forced to pass these measures.

WEI: (Through interpreter) This law is like an alarm sounding. It's a warning to the U.S. You should be worried. China will not endure this treatment as easily as it once did.

FENG: And, he continued, China will not hold back anymore in standing up for itself. Emily Feng, NPR News, Beijing.

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Tags: U.S.-China relations  U.S.-China trade  trade  China  sanctions