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Watch Out For Chinese Extraterritoriality

Having been thwarted in its purchase of Rio Tinto, the Chinese government (yes, the real bidder), has claimed that Rio Tinto's propoed merger with BHP should be stopped on the grounds of CHINESE anti-monopoly law.

China makes this claim on the basis that the combined company would do a certain amount of business in China. True enough. But both companies are domiciled in Australia. For them, doing business in China is merely incidental.

China's claim of regulatory authority over two Australian companies is "extraterritorial." That is, it claims that Chinese law ought to apply outside its own borders because the result of this transaction impacts China. This is a form of rising Chinese global imperialism.

Extraterritoriality used to be applied against China. In the 1840s, Britain fought, and won, a war that allowed its nationals to smuggle opium in China. Since such activities were clearly illegal, the peace treaty with Britain exempted British nationals from prosecution under Chinese law, even on Chinese soil.  A Briton in China could commit any crime, including murder, and be subject only to "British" law (lenient when applied to offenses against non-British nationals). It was during World War II that this provision was removed.

China has learned the lessons of imperalism all too well from the West. China is about to apply those lessons in its dealings with the West. This is just the first of many examples.

Long Chinese refugee ancestors.