China’s State Council Consolidates Authorities to Counter Sanctions

The law “On International Relations” adopted on June 28 in China is the first document in the modern history of the country that defines the general framework for the work of all participants in its foreign policy and, among other things, introduces the very concept of sanctions into Chinese law. The document provides for the expansion and clarification of the powers of the State Council of the PRC, the subordination of the Ministry of Foreign Affairs to the government and the empowerment of the cabinet of ministers with the right to introduce counter-sanctions measures. The law looks like a response to sanctions pressure from the US and the EU, but in practice it can simplify the situation with Chinese counter-sanctions – they will be more predictable.

The Standing Committee of the National People’s Congress of China adopted the Law of the People’s Republic of China on Foreign Relations. Part of the document, which will enter into force on July 1, 2023, is devoted to the approval of the basic principles and tasks of the country’s diplomatic activities. Among them are the protection of sovereignty and national security, the supremacy of the interests of the Chinese people, the pursuit of a peaceful development path, as well as foreign economic openness. It is noted that in its policy, China focuses, in particular, on Marxism-Leninism and the ideas of Mao Zedong – in the same row, the document cites the theory of “socialism with Chinese characteristics in a new era” by Chinese President Xi Jinping.

For the first time, the document describes the powers that are assigned to the authorities to consolidate the state administration of foreign policy and the economy, instead of performing disparate departmental tasks. Thus, the PRC Ministry of Foreign Affairs, as follows from the law, continues to deal with the main issues of international cooperation and carry out general management of the work of Chinese diplomatic missions, but will have to coordinate its activities with the State Council of the PRC (government), which is assigned the functions of general regulation of the foreign policy sphere, as well as the conclusion of agreements and agreements with other states. The new law links the activities of the Chinese Foreign Ministry with the work of other ministries and departments – they, within the framework of their powers and to fulfill national tasks, are also (to a greater extent than ever) involved in the country’s foreign policy activities.

For China, where the practice of the work of the Ministry of Foreign Affairs and other ministries is closer, for example, to the practices of the ministries in the Russian Federation in the 1990s, this kind of change in the structure of managing international relations is big news: de facto, we are talking about the transition of the foreign affairs agency from purely “ party” control to the perimeter of the government (State Council).

The overall consolidation, for which the Foreign Affairs Commission of the CPC Central Committee is responsible (previously, the Central Bank structures, in fact, were the only higher body for the PRC Foreign Ministry), should help achieve national goals: from economic development to strengthening national security. Wang Yi, head of the commission’s office, speaking about the new law, emphasized the expansion of legal tools to combat foreign aggression. Although new response mechanisms and external threats themselves are not named in the law, the State Council of the People’s Republic of China is vested with the right “as necessary” to adopt regulations and rules that prevent them. In the same context, the document clarifies that foreign companies operating in China must not only “comply with the law”, but also “not jeopardize national security” and “not be contrary to the public interest.”

In both cases, we are talking about counter-sanctions measures that China can take in response to US and EU sanctions. The Ministry of Foreign Affairs of the People’s Republic of China has been instructed to notify about their introduction and cancellation during the distribution of powers. Recall that in the spring of 2023, the United States imposed sanctions against a number of Chinese companies for activities in the interests of Russia. In addition, although there are no new sectoral restrictions on exports due to the high level of interdependence between the economies of China, the United States and, to a lesser extent, the EU, restrictions adopted in the fall of 2022 on the supply of high-tech chips and equipment for their production to China still apply. The possibility of lifting sanctions and restrictions remains on the agenda at all the most important meetings of the parties – for example, these issues were discussed during the visit of US Secretary of State Anthony Blinken to China last week (see Kommersant of June 20). The EU has also imposed sanctions against Chinese companies, and the possibility of additional restrictions, including trade restrictions, is enshrined in the new EC strategy on economic security (see Kommersant of June 21) and will be discussed in detail in Europe in the coming months. In practice, the new law, the new status of the PRC Foreign Ministry, and the legislative consolidation of sanctions and counter-sanctions can remove some of the problems in China’s foreign trade confrontations – the State Council, unlike the CPC Central Committee, is more subordinate to economic logic and more predictable in its actions: ideas Mao and macrostability are comparable values ​​for him.

Kristina Borovikova, Dmitry Butrin