China expands extraterritorial legal reach through lawfare

China is increasingly utilizing extraterritorial legal measures and lawfare to extend its influence beyond its borders, marking a significant shift from its historical resentment of foreign legal reach. This strategy aims to counter international sanctions, control the flow of sensitive technologies like artificial intelligence, and strengthen domestic political control.

Key examples of this trend include China’s April intervention in Meta’s $2 billion acquisition of the Singapore-registered AI startup Manus, and the implementation of new laws designed to prevent domestic companies from complying with foreign sanctions. China’s legal leverage is increasingly derived from its dominance in global supply chains, contrasting with the United States’ reliance on its control over the global financial system.

Recent legal actions have placed multinational corporations in difficult positions, forcing them to navigate conflicting judicial rulings between different jurisdictions. Furthermore, new regulations are expanding Beijing’s ability to impose entry and exit bans on individuals and regulate the movement of technology and ethnic-related matters under the umbrella of national security.