Welcome to Foreign Policy’s China Brief.

The highlights this week: China blocks companies from complying with U.S. sanctions, Zambia cancels a major human rights conference under Chinese pressure, and a convicted U.S. scientist relocates to Shenzhen.

Welcome to Foreign Policy’s China Brief.

The highlights this week: China blocks companies from complying with U.S. sanctions, Zambia cancels a major human rights conference under Chinese pressure, and a convicted U.S. scientist relocates to Shenzhen.

China Blocks U.S. Sanctions Compliance

On Saturday, China publicly barred its companies from complying with U.S. sanctions after the United States blacklisted five Chinese refineries for processing Iranian oil. This marks the first time China has invoked its so-called blocking statute—one of its strongest tools for countering foreign sanctions.

Though China objects to the U.S.-led global sanctions regime, dollar dominance generally leaves Chinese financial institutions little choice but to comply with it (albeit with some workarounds).

But in 2021, China’s Commerce Ministry issued the blocking statute, which allows firms to sue parties that benefit from complying with foreign sanctions and authorizes state compensation for resulting losses. Crucially, the statute also empowers Chinese authorities to issue public directives prohibiting compliance with foreign sanctions—as is the case now.

China’s restraint until now is notable given the steady expansion of U.S. and European Union sanctions against Russia and Iran in recent years. I suspect that reluctance has stemmed from quiet lobbying from Chinese firms........

© Foreign Policy