The CCP’s Anti-Foreign Sanctions Law: An Accelerator for Decoupling

Hello, everyone, welcome to “Inconvenient Truths”. I am your host Jennifer Zeng. 

Several days ago, the Chinese Communist Party, the CCP,  passed an “Anti-Foreign Sanctions Law” to fight back any sanctions imposed by other countries. Today let’s talk about what’s inside this law, how it will affect businesses both inside and outside China, why the CCP passed such a law at such a time, and what kind of consequences it may bring to the CCP.

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In the past few days, a Virginia mom became very popular by likening what’s happening in the US now to China’s Cultural Revolution, a tragedy that had killed 7 million, some say up to 20 million people in China. There has been quite a lot of media that covered her story.

Actually, I did a program one year ago, comparing what was happening in the US with China’s Cultural Revolution from 9 different aspects. I’d say I was again one year earlier than the mainstream media in terms of realizing and speaking out about some very worrying social phenomena in the US. 

But you know what? YouTube has ridiculously put an “age restriction” on this video. Even when I share it on social media, what people see is a black box with a warning message to scare people away.  

They also don’t allow ads on this video to suppress my channel. So I do need more people to help me to fight censorship. 

What Is Inside the CCP’s “Anti-Foreign Sanctions Law”?

Now, let’s move on to our topic today: What is inside the CCP’s “Anti-Foreign Sanctions Law”? 

This law was passed by the CCP’s rubber stamp congress on June 10. If I am not wrong, it is the CCP's second shortest law.  It has 16 articles, and only about 1100 words. The main message is, if any country dares to interfere with China’s internal affairs with any excuses or means, the CCP will fight back.

How does it fight back? 

It will adopt counter sanction measures against entities and individuals, including their spouses and immediate family members, who are involved in sanctioning the CCP. 

And the counter sanction measures include:

One,  denial of visa, denial of entry, cancellation of visa or deportation; 

Two, seizure and freezing of all your assets in China;

Three, prohibit or restrict organizations and individuals in China to carry out transactions, cooperation and other activities with the sanctioned entities and individuals.

Four, “Other necessary measures”.  There is no explanation as to what are “other necessary measures”, so it’s all up to the CCP to decide what the “other necessary measures” are when it applies the law. 

Article 11 says that any organization and individuals inside China should implement the countermeasures that the CCP adopts to fight back against other countries’ sanctions. 

Article 12 says no organizations or individuals may implement or assist in the implementation of discriminatory restrictive measures taken by foreign countries against Chinese citizens and organizations.

Article 14 says any organizations and individuals who do not implement, do not cooperate with the implementation of the CCP’s anti-sanction countermeasures, will be held legally responsible. 

Article 15 says, for foreign countries, organizations or individuals, who implement, assist, or support acts that endanger the CCP’s sovereignty, security and interests, when necessary anti-sanction countermeasures need to be implemented, the law can be a reference as to how to implement countermeasures. 

I think this article was purposely written this way so that it was difficult for people to understand. But the meaning is very simple: for any foreign countries, organizations and individuals, if the CCP thinks you have endangered its sovereignty, security and interests, it will punish you. Just as simple as that. 

This law has already become effective on June 10, immediately after it was passed. 

 Possible Consequences 

Now, let’s talk about the possible consequences of the law. 

First of all, it gives multinational companies a huge sense of insecurity, making it much easier to break the laws of both China and other countries. 

For example, the United States sanctions some Chinese companies, requiring U.S. investors not to invest in enterprises with a CCP military background, you have to divest, sell the shares, and bonds of these Chinese companies, etc.

However, Article 15 of the CCP’s "Anti-Foreign Sanctions Law” says if you implement, assist, or support acts that endanger the CCP’s sovereignty, security and interests, you become a target for the CCP’s countermeasures.

But if you do not implement the U.S. law, it is illegal in the United States.

Let’s use the HSBC bank as an example. 

When the US was investigating whether the CCP’s company Huawei had sold prohibited products to Iran, it needed HSBC to cooperate with the investigation. HSBC needed to provide Huawei’s transaction records to the US. If it refused, it would be violating US law. So it cooperated. 

That’s how the US was able to arrest Huawei’s CFO Meng Wanzhou. 

However, after the CCP’s “Anti-Foreign Sanctions Law” was passed, HSBC will be considered as having cooperated with a foreign country’s sanction against the CCP, and damaging the CCP’s interest. So it may become a target of CCP’s countermeasures. 

So what can HSBC do? 

On the one hand, it relies heavily on the East Asian market; on the other hand, it relies on the US bank clearing system. If it is not allowed to use this system, its business will be game over.

So what can it do? It’s really a dilemma, right? 

The same situation exists for the international military-industrial chain. 

For example, companies that sell arms to Taiwan can also be targeted, such as Lockheed Martin, which produces the F-16 jets, Boeing, which produces anti-ship missiles, General Dynamics, which produces tanks.  Even these companies’ civil products and departments can also be targeted by the CCP. 

Not only them, but also their suppliers including component manufacturers, software companies, and chip makers, etc, can all be regarded for assisting and supporting acts that “endanger the CCP’s sovereignty, security and interests.” 

The vagueness of the CCP’s Anti-Foreign Sanctions Law also makes it more threatening, as you don’t know where the boundaries are. 

So more companies may start considering leaving China, or hesitate about going inside China, or doing business with China. 

So this law will practically help more countries to decouple with China. 

Another immediate consequence of this law is that it threatens Hong Kong’s status as an international financial center. 

You know, although not many westerners have assets in CCP’s China,  many people do have assets in Hong Kong. But Hong Kong has almost been turned into a city of CCP’s China. So the CCP could also push to have the same law be implemented in Hong Kong, and that would accelerate the withdrawal of international capital from Hong Kong.

So again, this law could accelerate the decoupling between other countries and China, especially between the US and China. 

Let’s demonstrate this from another angle. 

For example, after the United States imposed sanctions on Huawei, China’s biggest chipmaker Semiconductor Manufacturing International Corporation (SMIC) could not sell chips to Huawei. However, if it does not sell chips to Huawei, according to CCP’s new Anti-Foreign Sanctions Law, it will be violating the CCP’s law. 

If it is forced to sell chips to Huawei, the US could impose sanctions on it too. As a result, all international companies that have cooperation with SMIC can only stop the cooperation.

The impact on Taiwan Semiconductor Manufacturing Company(TSMC) can be bigger. According to the US sanctions order, TSMC can't supply chips to Huawei anymore, but it can continue to supply to other Chinese cell phone makers such as Xiaomi. 

Now, according to the CCP’s Anti-Foreign Sanctions Law, TSMC will become a target of retaliation by the CCP, and TSMC's business in China will probably be frozen, and all Chinese businesses cannot do business with TSMC either. So the result will be, even Xiaomi and other Chinese companies may not get chips from TSMC.

So that’s why we said that this new law will accelerate the decoupling between other countries and China, something that hasn’t been achieved via the trade war and technology war before. 

Actually, many Chinese commentators said that Xi Jinping is indeed the “Chief  Accelerator” who is accelerating the speed of the CCP’s demise. 

Why Now? 

Now, let’s talk about why the CCP passed such a law now?

First of all, it shows that Xi Jinping is really feeling a tremendous amount of pressure.

The idea of making such a law was first proposed by Xi Jinping last November.  After only 7 months, it was passed by the CCP’s congress, without any public consultation process. 

Why couldn’t the CCP wait longer? 

We know that on June 8, the U.S. Senate passed the U.S. Innovation and Competition Act, which includes a $250 billion budget to support U.S. high-tech industries to compete with the CCP. 

This is a sign that in the US, more and more people are determined to resist the CCP. 

Only 2 days after the US senator passed the bill, the CCP’s Anti-Foreign Sanctions Law came to the forefront. So you can say CCP’s new law is an “eye for an eye” reaction to the US.

Also, more and more countries are calling for a thorough investigation into the origin of the CCP virus. This also made the CCP feel greatly threatened. 

Another reason is that the CCP fears that more countries will start imposing sanctions on the CCP, so it installed such a law in advance, to scare other countries, to achieve a deterrent effect. 

Also, as the US government has given a 90 day deadline for a report about the origin of the COVID19 to be delivered. If the conclusion is that the virus was released, or leaked from the Wuhan lab, more and more countries could demand compensation and impose sanctions on the CCP.  So we can say the CCP passed such a law in a panic mood. 

CCP’s New Red Line

Another notable event recently is that people are mocking about the CCP’s “new red lines”.

On June 6, three U.S. senators arrived in Taiwan on a U.S. Air Force freighter, to meet with President Tsai Ing-wen to discuss security and other issues. They also announced that the US would donate 750,000 doses of CCP virus vaccine to Taiwan.  

Some amazing photos of the US Air Force C-17 flying over Taipei City have been circulated on the Internet, such as this one showing the magnificent aircraft flying over Taiwan’s landmark building 101 Tower,  and this one, showing the aircraft flying over another landmark building, the Grand Hotel, Taipei.

US Air Force C-17 Taiwan’s landmark building 101 Tower. (Credit: Min Der, Chen)

US Air Force C-17 Taiwan’s landmark building the Grand Hotel, Taipei (Credit: Min Der, Chen)

Netizens in both China and Taiwan immediately realized that for a US military aircraft to land in Taiwan, it is not a small matter. It has definitely stepped on the CCP’s “red line.”

People still remember that 3 years ago, in 2018, the CCP’s  deputy commander of the Nanjing Military Region Wang Hongguang said that if the US troops dared to go to Taiwan, the CCP’s army will invade and take over Taiwan in 3 days.

Li Kexin, CCP’s deputy chief of mission at the CCP’s Embassy in the United States also told the U.S. Congress three years ago that the day when the U.S. sent warships to Taiwan, would be the day when the CCP’s army would unify Taiwan by force.

However, this time, when the US military aircraft did go to Taiwan, the CCP had been quiet for several days, saying nothing.

So some netizens made up some new threat for the CCP, which is, “If you dare to cross our red line, you will meet a new red line!”

Funny, right? Yet nobody knows what that new red line really is.

Recently there is another big change in the CCP’s foreign policy and international propaganda strategy. Xi Jinping said that the CCP should now create a "credible, lovable and respectable image of China,” and big money will be spent to achieve this.

This reminds people of the CCP’s first generation leader Mao Zedong’s famous declaration, “All reactionaries are paper tigers”. Now people have started to realize that the real paper tiger is instead the CCP.  

 Well, that’s all for today’s “Inconvenient Truths”. Thank you very much for watching. Please subscribe to and share my channel, like my videos and leave us some comments to give me a boost. 

Thank you. See you on Thursday!

6/14/2021*

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