China Says Foreign State Immunity Law 'Fully Adheres' To International Standards

China has hailed the passing of its new foreign state immunity law as one that focused on protecting the interests of parties involved, while also encouraging "friendly exchanges" with other nations.

"The law stipulates the rules for Chinese courts to handle civil cases involving a foreign State and its property, with a view of protecting the lawful rights and interests of the parties concerned, safeguarding the sovereign equality of States, and promoting friendly exchanges with other countries, which all in turn boost China's higher-level opening-up," the Chinese foreign ministry's spokesperson said in a statement Tuesday.

The foreign ministry said the law "fully adheres" to international law, and was also "consistent with general state practices."

The Law of the People's Republic of China on Foreign State Immunity, which was passed Friday by the Standing Committee of China's National People's Congress, now allows Chinese citizens to sue foreign individuals or companies. Previously, Beijing never allowed such cases wherein foreign governments or entities were taken to Chinese courts.

Under the law, Chinese courts will be allowed to "take compulsory judicial measures against a foreign State's commercial property under strictly limited circumstances," the foreign ministry said.

The law "generally brings China in line with the approach of most other states" wherein most Western countries, after World War II, enacted laws that helped protect companies engaging in international business, James D. Fry, an associate professor of law at the University of Hong Kong, said.

From the "absolute immunity" of foreign states in Chinese courts, the country will now adopt "restrictive immunity," which is in line with the approach of other governments that allow their citizens to sue foreign states in domestic courts.

Xinmin Ma, director-general of the Department of Treaty and Law of the Foreign Ministry, told reporters in a recent interview that before the law's adoption, some foreign courts accepted "baseless lawsuits against China," but with the immunity law, the country now has legal basis to counter lawsuits it deems have no legal merit, state media reported.

Washington is one such foreign government that has filed lawsuits against some Chinese nationals and entities.

During the Trump administration, the now defunct China Initiative was introduced to target "economic espionage." Chinese nationals and individuals with relations to Hong Kong, Taiwan and diasporas, were prosecuted during the program's three-year run. Around 80% of economic espionage prosecutions brought by the U.S. Department of Justice (DOJ) in relation to the initiative alleged conduct that would "benefit the Chinese state," the DOJ said.

Critics of the initiative have argued that the program increased cases of racial profiling against people of Chinese descent and the instances could extend toward Asian Americans and Asian immigrants. The DOJ repeatedly denied that the program was engaged in racial profiling.

MIT Technology Review analysts found in 2021 that 88% of 148 people charged under the China Initiative were of Chinese heritage. The 130 charged individuals included American citizens of Chinese descent, Chinese citizens, and people with connections to Hong Kong, Taiwan, and diaspora communities across Southeast Asia.

The law's passing came at a time when U.S.-China relations have been fractured in recent months due to the economic titans' tech war, trade sanctions, and the Taiwan conflict. It remains to be seen how Beijing's new move will affect its ties with the world's largest economy.

China's foreign immunity law will take effect starting Jan. 1, 2024.