Thursday, 14 January 2021 10:22

New China by-law takes a page out of the American playbook Featured

New China by-law takes a page out of the American playbook Image by Steve Buissinne from Pixabay

China has introduced a new by-law that will allow its companies to sue for damages in the event that their financial interests are affected by actions taken by third-party, non-American companies abroad.

This will open the door for Huawei to sue Taiwan Semiconductor Manufacturing Company for not supplying chips to the telecommunications firm, with an US order getting in the way.

The Asia Times said the new by-law, which has the cumbersome name Regulations to Stifle Improper Extraterritorial Application of Foreign Laws and Measures, had been instituted by the new Chines Commerce Minister Wang Wentao.

The US put rules in place in 2019 and 2020 to prevent Huawei from obtaining semiconductors which it needed for its smartphones. To do this, the Americans first put Huawei on an list called the Entity List which made it impossible for the Chinese firm to buy good from American companies.

Huawei got around this by buying what it needed from branches of American firms in other countries. The only thing it could not source was the proprietary apps that come with Google's Android mobile operating system.

Last year, the US banned companies, both American and non-American, from supplying any product made using US software or hardware to Huawei, unless the company in question obtained a waiver from the Commerce Department.

Washington periodically blacklists countries for political reasons and prohibits companies which do business in the US — both American and non-American — from doing business with any entities in these countries.

For example, no company that does business in America can do business with an Iranian firm. The US is the only country which indulges in this practice.

The Chinese by-law is not cut from the same cloth. It allows a Chinese company, which has been deprived of income in the US due to any non-American company following Washington's demands, to sue for damages in China.

And Beijing has been quick to characterise this measure as something that is connected to national security. As the Asia Times put it, it was meant to "criminalise acts by foreign entities to impinge on the rights and interests of Chinese individuals and organisations".

The newspaper quoted an academic as explaining the statute thus: "The new regulation recognises Washington’s jurisdiction over American firms, as it can ban them from doing business with Chinese partners just like Beijing can do the same to Chinese entities.

"But the new message is clear: Washington does not have the extra-territorial power to ban any third-country companies from trading with China and Beijing will not recognise such 'long-arm jurisdiction'. And, non-American companies may be punished under the new regulation if their compliance with US bans inflicts losses on their Chinese buyers and partners.”

Exactly how this will play out remains to be seen, but it will mean that companies like TSMC will have to tread with care to avoid offending either the US or China – it needs to maintain sales in both markets.

Read 2742 times

Please join our community here and become a VIP.

Subscribe to ITWIRE UPDATE Newsletter here
JOIN our iTWireTV our YouTube Community here


Hybrid cloud promises to bring together the best of both worlds enabling businesses to combine the scalability and cost-effectiveness of the cloud with the performance and control that you can get from your on-premise infrastructure.

Reducing WAN latency is one of the biggest issues with hybrid cloud performance. Taking advantage of compression and data deduplication can reduce your network latency.

Research firm, Markets and Markets, predicted that the hybrid cloud market size is expected to grow from US$38.27 billion in 2017 to US$97.64 billion by 2023.

Colocation facilities provide many of the benefits of having your servers in the cloud while still maintaining physical control of your systems.

Cloud adjacency provided by colocation facilities can enable you to leverage their low latency high bandwidth connections to the cloud as well as providing a solid connection back to your on-premises corporate network.

Download this white paper to find out what you need to know about enabling the hybrid cloud in your organisation.



It's all about Webinars.

Marketing budgets are now focused on Webinars combined with Lead Generation.

If you wish to promote a Webinar we recommend at least a 3 to 4 week campaign prior to your event.

The iTWire campaign will include extensive adverts on our News Site and prominent Newsletter promotion and Promotional News & Editorial. Plus a video interview of the key speaker on iTWire TV which will be used in Promotional Posts on the iTWire Home Page.

Now we are coming out of Lockdown iTWire will be focussed to assisting with your webinars and campaigns and assistance via part payments and extended terms, a Webinar Business Booster Pack and other supportive programs. We can also create your adverts and written content plus coordinate your video interview.

We look forward to discussing your campaign goals with you. Please click the button below.


Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

Share News tips for the iTWire Journalists? Your tip will be anonymous




Guest Opinion

Guest Reviews

Guest Research

Guest Research & Case Studies

Channel News