Between a Rock and a Hard Place Under China’s Anti-Sanction Law 2021: The Game- Theoretical Perspective

Abstract

The Chinese Anti-Sanction Law (ASL 2021) has for the first time created a legal basis for sanctioning specific foreign entities for conduct inconsistent with China’s core interests and policies. Those involved in implementing foreign sanction measures can be put on an anti-sanctions list and may be denied entry into China or be expelled from the country. The escalated confrontations are part of a broader global trend of tightening export controls, sanctions and foreign investment controls on national security or public interest grounds. At the heart of the problem is the incongruity between the US and Chinese perspectives on distinct values such as human rights, national security and other public policies. The conflict of law arises inevitably as a multinational company (MNC) attempts to comply with both US law and ASL 2021. The law creates a legal conundrum for foreign MNCs, which are placed in a proverbial rock-and-hard-place situation. Using in-depth analyses of China’s evolving sanctions regime, it is essential to explore resolutions to mitigate the escalated tension and break the deadlock. It is therefore necessary for foreign entities to navigate a delicate balancing act between compliance with US laws and China’s requirements for continued transactions. Blocking Mechanism, Anti-Sanction Law, National Security, Entity List