China's action against unjustified extraterritorial sanctions is necessary and proportionate

The Ministry of Commerce of China issued a ban on Saturday prohibiting any recognition, enforcement or compliance with United States sanctions imposed on five Chinese companies on the grounds of their alleged involvement in Iranian petroleum transactions.

The Commerce Ministry will continue to closely follow relevant cases of improper extraterritorial application of national laws and measures, and will carry out relevant work in accordance with the law if there are cases provided for in the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures under which entities and individuals within China are prohibited from implementing the sanctions.

According to the regulations, such improper extraterritorial jurisdiction measures refer to actions taken by a foreign country that violate international law and the basic norms governing international relations and that harm China's sovereignty, security and development interests, or the legitimate rights and interests of Chinese citizens and organizations.

Washington's sanctions, imposed over alleged links to Iranian petroleum transactions, lack United Nations authorization and therefore violate international law and the basic norms of international relations. The US is not merely targeting specific companies; it is asserting jurisdiction over third-party trade between sovereign actors. China's response, which is justified and defensive, is to deny that jurisdiction any legal standing.

There is a certain symmetry here. The US has long relied on the dominance of the dollar and its financial system to extend its sanctions reach. Secondary sanctions — penalizing entities that transact with blacklisted parties — have become a staple of US statecraft. China is now resolutely protecting the legitimate rights and interests of its enterprises from such pressure.

The ban, as a spokesperson for the Ministry of Commerce stressed, does not affect China's compliance with international obligations, nor does it affect China's protection of the legitimate rights and interests of foreign-invested enterprises in accordance with the law. That is a reassurance to multinationals who might worry about being caught in the cross fire. Yet it also draws a red line: Chinese entities are not to comply with illegal US sanctions.

On Thursday, in his video call with US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer on Thursday, Vice-Premier He Lifeng expressed Beijing's grave concern over recent US restrictive measures against China in the economic and trade fields, and both sides stressed the need to continuously enhance consensus, manage differences, and strengthen cooperation.

The juxtaposition is hard to miss. On the one hand, senior officials on both sides talk of candid, in-depth and constructive exchanges and the need to stabilize relations. On another, new US curbs continue to proliferate.

That dissonance is precisely what Beijing is now calling out. If Washington genuinely values a healthy, stable and sustainable economic relationship, it cannot keep expanding the perimeter of sanctions and export controls and expect business to continue as usual.

China opposes the weaponization of trade and economic measures by any country. The prohibition order is a lawful and necessary step to safeguard its sovereignty and the legitimate rights of its enterprises, in accordance with international law and domestic regulations. At the same time, China remains committed to international cooperation and stands ready to resolve trade-related disagreements through constructive dialogue.

For a relationship as consequential as that between the world's two largest economies, if the rhetoric of stability is to mean anything, it will have to be matched by restraint in practice on the US side. At present, the US continues to demonstrate that it saying one thing and doing another has become the norm rather than the exception.