In March 2025, the Chinese Communist Party (CCP) introduced a sweeping set of new regulations that allow the regime to retaliate more aggressively against foreign sanctions, especially those coming from the United States. These new rules, titled the Regulations for Implementing the Anti-Foreign Sanctions Law of the People’s Republic of China, are already creating deep concern among foreign businesses and economic experts. The regulations, which clarify and expand enforcement of the Anti-Foreign Sanctions Law passed in 2021, may significantly increase the risks of doing business in China. Experts warn that the pressure from these rules could push even more foreign companies to exit the country.
What the Anti-Foreign Sanctions Law Allows
The Anti-Foreign Sanctions Law, passed by China’s legislature in June 2021, was designed to respond to what the Chinese government calls “discriminatory restrictive measures” from foreign countries. These include sanctions against Chinese officials, entities, and companies related to human rights abuses in Xinjiang, crackdowns in Hong Kong, and other internal Chinese policies.
The law grants broad authority to Chinese government agencies to take countermeasures. These include banning individuals from entering China, freezing assets within the country, and prohibiting business transactions. It even allows legal action against foreign companies or individuals that comply with sanctions imposed by other governments.
On March 24, 2025, the Chinese State Council took the law a step further by releasing detailed regulations that describe how these countermeasures will be enforced. According to the government, the new rules aim to strengthen China’s legal defenses and allow it to “step up countermeasures to foreign sanctions.”
A Tool to Retaliate Against the United States
Experts say the main target of the law is the United States, which continues to lead the world in enforcing international sanctions. Wu Shaoping, a U.S.-based rights lawyer originally from China, told The Epoch Times, “At present, on a global scale, only the United States has the capability and power to impose influence on other countries’ human rights violations, breaches of international rules, or violations of U.S. law and international law.” He continued, “Only the U.S. can impose international sanctions now… This law, in my opinion, is primarily aimed at the United States.”
David Huang, an economic researcher and commentator, agrees that the law is a reaction to rising external pressure. He pointed out that the seizure of Chinese-owned farmland in Missouri, as part of a $24.5 billion lawsuit related to COVID-19, was a key event that may have accelerated the release of these regulations. “This has accelerated [the introduction of] the ‘Regulations for Implementing the Anti-Foreign Sanctions Law,’” Huang said.
Article 7: A Threat to Intellectual Property
One of the most alarming parts of the new regulations is Article 7, which builds upon Article 6 of the original Anti-Foreign Sanctions Law. This section outlines the property that can be seized or frozen if a company or individual is added to China’s sanctions list. It includes not only physical goods and bank accounts, but also intellectual property such as patents, software, and trademarks.
Wu warned that this creates a serious threat for foreign businesses that rely on innovation and intellectual assets. “According to this sanction measure, I can openly seize your intellectual property,” he said. “Your intellectual property will no longer belong to you.”
Huang added that the impact could go beyond physical investments in China. “Many foreign investors, foreign enterprises, or foreign political entities may not have many investments in China that can be frozen,” he explained. “However, by freezing intellectual property, such as the intellectual property of Windows or other software, or even trademarks and brands… these products could be prohibited from being sold in China. Their advertisements might even be banned, which would be a devastating blow to their industries.”
In other words, a company does not need to own factories or offices in China to be affected. If it owns a product or brand sold in the Chinese market, that asset could be seized or shut down overnight.
Legal Risks for Companies That Follow Foreign Sanctions
The new law also makes it illegal for companies operating in China to comply with foreign sanctions. According to the regulations, any organization or individual within China is required to reject and not support foreign governments’ restrictive measures. Companies that fail to enforce China’s countermeasures or that cooperate with foreign restrictions could face penalties, including bans on business operations and asset freezes.
Chinese parties that suffer harm due to a foreign company’s compliance with sanctions can even file lawsuits in Chinese courts. These lawsuits can demand financial damages or a stop to the “infringing acts.” This raises the possibility that a company could be sued simply for following U.S. or European laws.
The CCP has also given itself full control over the enforcement process. The regulations allow a range of Chinese government departments to carry out enforcement, including those in charge of public security, customs, finance, and intellectual property. Decisions made under the law are final and cannot be challenged in Chinese courts.
Companies Face a Difficult Choice
With these new legal risks, foreign companies now face an impossible situation. If they follow U.S. or European sanctions, they risk punishment in China. If they follow Chinese rules, they could face fines, lawsuits, or criminal penalties in the West.
Wu Shaoping explained the pressure clearly: “Undoubtedly, for foreign businesses, their risk levels will further increase. Many foreign companies rely on research and development and intellectual property to capture market share. If, in communist China, intellectual property can be seized at will, what kind of security do foreign businesses have?”
He added that the situation could force companies to reconsider their presence in China entirely. “Life and death, as well as the power to seize everything, rest with the CCP,” he said. “For a foreign enterprise, how can they operate at ease in a country or market with such immense risks? It is impossible for them.”
Will This Spark a Foreign Capital Exodus?
The new law is likely to speed up the departure of foreign businesses from China. Wu predicted that many companies will simply decide they cannot afford the risk. “The result, I believe, is that foreign businesses in China will continue to flee in large numbers,” he said. “They will realize that the risks of staying there are too great. They have no idea when they might be suddenly shut down and targeted.”
Even companies that are not directly affected may feel the pressure to leave. According to Huang, “Some companies may reassess investment with risks in China and even consider adjusting their investment strategies.” Others may remain but will “pay much closer attention to policy changes.”
This comes at a time when China is actively trying to attract foreign investment to support its slowing economy. However, by increasing the legal risks for international companies, the government may be scaring away the very investors it wants to keep.
Are These Rules Just for Show?
Some observers believe that the regulations may be more of a political message than a policy meant for full enforcement. Wu noted that the CCP chose to issue these rules as regulations, not as a new law. This means they carry less legal weight and can be changed or withdrawn more easily. “Now, it issues a downgraded version of regulations,” Wu said. “Which shows that the CCP itself knows that if this law really faces challenges, it will be very hard to enforce.”
He also pointed out that the CCP is using these rules as a form of internal propaganda. “It’s just an internal propaganda [move], showing that … the CCP [is] now also able to counter foreign actions and extend [its] reach through long-arm jurisdiction,” he said.
Even so, the risk to foreign businesses is real. Whether the law is used aggressively or selectively, it now gives the CCP legal power to punish companies in ways that were not previously possible.
A Warning to the Global Business Community
The new anti-sanctions regulations are not just another bureaucratic update. They mark a turning point in how China deals with foreign pressure and in how it expects foreign businesses to behave. These rules give the Chinese government tools to retaliate, punish, and even take over assets from companies that fall out of favor.
While some firms may decide to stay and take their chances, many others will likely head for the exits. As the world grows more divided and legal conflicts become more intense, global companies must now choose: risk doing business in China or risk losing access to one of the world’s biggest markets. Either way, the decision will come with serious consequences.
