China Invokes Anti-Sanctions Law for First Time, Blocking US Measures on Five Refineries
Primary region China
Tags Trade · Diplomacy · Economy
Regions China · US · Middle East
China's Ministry of Commerce issued its first-ever blocking order under the 2021 Anti-Foreign Sanctions Law on May 2, 2026, declaring that US sanctions on five Chinese refineries linked to Iranian oil 'shall not be recognized, enforced, or complied with.' The five refineries — Hengli Petrochemical (Dalian), Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical — were targeted by the US Treasury for purchasing Iranian oil. The blocking order establishes a 'Three Nos' formulation (no recognition, enforcement, or compliance). However, China's NFRA separately told major banks to halt new lending to the five refineries, a pragmatic concession that Bloomberg characterized as China quietly pulling back financially while publicly pushing back legally. New State Council regulations on countering improper foreign extraterritorial jurisdiction also came into effect.
Strategic interpretation
The conflicting signals from Beijing — publicly blocking sanctions while privately directing banks to cut lending — reveal a calibrated strategy of symbolic resistance paired with practical compliance. This approach allows China to demonstrate sovereignty and build its reputation as a counter-sanctions model for other nations while avoiding a direct confrontation with US financial power. The timing ahead of the Trump-Xi summit suggests Beijing is building negotiating leverage, showing it has retaliatory tools without fully deploying them. The new State Council regulations materially expand China's legal toolkit for future sanctions disputes.