Hitting back

China's anti-sanctions law provides a mature legal framework for countering the abuse of sanctions as instruments of coercion

Trade sanctions, designed as instruments of order, justice and responsibility, have increasingly become tools of coercion, commercial exclusion and geopolitical pressure in practice. They disrupt trade, undermine economic development, hinder education and research, damage cross-cultural harmony and instill anxiety in societies that have no direct role in political disputes. When sanctions become coercion, nations have both the right and the responsibility to defend their economic sovereignty, giving rise to the legitimacy of new laws to mitigate those negative effects on the global economy. Modern legal systems already recognize the need for anti-piracy laws to protect navigation, anti-trust laws to prevent market domination, anti-dumping laws to defend fair trade, anti-terrorism laws to protect public security, anti-corruption laws to safeguard institutions and anti-crime laws to preserve social order. Now there is also a need for anti-sanctions laws.

China has already taken action by introducing the Anti-Foreign Sanctions Law of the People's Republic of China, adopted in 2021. Its implementation is not a call for confrontation, but a legal defense against the weaponization of interdependence.

Sanctions are not a meaningful means of engaging in international trade, development or economic cooperation. Trade depends on rules, trust and mutual benefit, while sanctions rely on pressure and exclusion. Economic development requires stable expectations, investment, mobility and long-term confidence, all of which can be weakened when sanctions disrupt normal economic activity. When sanctions restrict finance, shipping, insurance, food, energy, technology or medical supply chains, they not only affect political leaders. They affect businesses, workers, students, patients, consumers and researchers. Small businesses lose suppliers. Banks over-comply out of fear. Scientific cooperation is delayed. Students and scholars face barriers. Cultural exchanges narrow. Suspicion replaces trust; anxiety replaces confidence; exclusion replaces dialogue. In this sense, sanctions harm more than trade and prosperity. They harm values, mental well-being, cross-cultural understanding and education. They weaken the human foundations of globalization itself.

Sanctions rarely achieve their stated political aims. They fail to change targeted nations' behavior, facilitate dialogue, advance peace or build mutual trust. Yet they are described as successful because they "send a message", create pressure, damage transactions or isolate targets — simply a rhetorical success.

The belief in the effectiveness of sanctions persists because they serve lobbying groups, media narratives and political performances. If they cause pain, they are said to be working. If they fail to change behavior in the desired way, more sanctions are demanded. This circular logic turns policy failure into symbolic success. It rewards disruption rather than solutions. It allows policymakers to claim moral seriousness while transferring the real costs of sanctions to ordinary people and developing economies. Sanctions are instruments of global shock that do not manage complexity but inject instability into it. They do not create efficient markets; they distort them. They do not prove moral superiority; they reveal the failure to compete fairly in an open system.

For decades, the language of the free market has been used to defend openness, competition and efficiency through the "invisible hand", a concept purported by many since Adam Smith’s conceptualization. Yet crude sanctions reveal the "visible hand" behind the so-called invisible hand. If companies are free only when they obey the geopolitical preferences of powerful states, the market is no longer free. It becomes conditional because sanctions are signs of unwillingness to compete in an open system. When countries cannot win through innovation, productivity, quality, price or cooperation, they may turn to restrictions, bans, financial pressure and technological exclusion. This is not confidence in competition. It is the fear of competition.

The same logic applies to the petrodollar and wider financial structures. For decades, dollar-based systems gave many Western countries and their allies enormous influence over global finance and energy transactions. This was effective because many countries trusted the system as stable and useful since the end of World War II. Yet coercive sanctions are reducing that appeal. The more financial infrastructure is weaponized, the more countries seek alternatives. Excessive sanctions may accelerate the very multipolarity they seek to prevent.

Sanctions create an unequal distribution of costs and benefits. A few actors may gain strategically, commercially or politically. They may capture markets abandoned by competitors. They may redirect investment. They may use compliance systems to strengthen their own dominance. They may present themselves as defenders of morality while turning sanctions into instruments of economic advantage. By contrast, most countries lose. This is especially true for the Global South and South-South cooperation. Developing economies depend on affordable energy, infrastructure finance, technology transfer, food security and stable trade routes. When sanctions disrupt these flows, the damage spreads far beyond the sanctioned countries. It affects ports, logistics, payments, insurance, construction, education and industrial development.

Sanctions punish interdependence, neutrality and countries for maintaining ordinary economic relations. They convert global development into a hostage of geopolitical rivalry. This is why China's anti-sanctions law should be understood not only as a Chinese legal concern, but as part of a wider defence of development fairness. In earlier periods, sanctions could be framed through narrow diplomatic narratives. However, the digitized world today allows people to compare claims, observe double standards, and see the gap between humanitarian language and economic harm. People are less easily persuaded by unsolicited rhetoric. They can see when sanctions damage ordinary citizens while being hyped as a moral action. They can see when "rules" are applied selectively. They can see when pressure is called justice and economic pain is called effectiveness.

An anti-sanctions law gains legitimacy when sanctions themselves lose moral credibility. The greatest danger is not only economic damage. It is lawlessness. If powerful actors normalize coercion without legal restraint, the world risks moving toward a "Wild West" situation in which pressure replaces procedure and force replaces consent. Smaller countries become vulnerable. Leaders may be threatened, isolated, humiliated or targeted through extraterritorial mechanisms. International relations must not be governed by intimidation.

Countries are responding to this foul play by joining, supporting or developing legal frameworks that challenge the misuse of sanctions as instruments of coercion. China's anti-sanctions law is a mature legal framework grounded in clear standards, transparent procedures and credible safeguards against unlawful extraterritorial measures. It provides a clear definition of coercive sanctions, stronger protection for aggrieved entities, more effective remedies and proportionate countermeasures, including the announcement and adjustment of countermeasure lists, prohibitions on compliance with discriminatory foreign restrictions, and the right of affected Chinese citizens and organizations to seek legal remedies. This approach aims to deter escalation rather than encourage it, while reassuring legitimate foreign investors that normal business remains welcome. It also signals that China supports lawful trade, open cooperation and international engagement, but rejects coercion disguised as legal authority.

China is not alone, as many countries in the Global South hold an unfavorable view of unilateral coercive measures and illegal sanctions that affect international trade, development, sovereign equality and sustainable growth. In this sense, anti-sanctions law will become a more inclusive and fair legal response in favor of harmony, peace and prosperity. It tells the world that China and like-minded countries seek to trade, invest, innovate and cooperate, rather than living under intimidation. It tells domestic enterprises that the legal system is moving toward stronger protection. It tells the Global South that development should not be subject to external veto. And it tells the international community that globalization cannot survive if interdependence is turned into dependency. Ultimately, the anti-sanctions law is not merely a response to sanctions. It is a statement about the future of the international order.

The author is a professor of Innovation and Organization Studies and the chief economist of New Structural Economics at Liaoning University.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.