Context

China has passed a new law restricting sensitive exports to protect national security, a move that adds to policy tools it could wield against the US as tensions -- especially in technology -- continue to rise.

What does the Law state?

• The law comes into effect on December 1.
• It allows Beijing to "take reciprocal measures" against countries that abuse export controls and pose a threat to national security.
• Technical data related to items covered will also be subject to export controls.
• The new law, "formulated to safeguard national security and interests", adds to China's regulatory toolkit which also involves a restriction catalogue of tech exports and an unreliable entity list.
• Where any country or region abuses export control measures to endanger the national security and interests of the People's Republic of China, (it) may take reciprocal measures.
• Applicability: Export controls under the law will apply to civilian, military and nuclear products, as well as goods, technologies and services related to national security.
  • Chinese authorities will formulate and adjust an export control list of items to be published in a "timely manner".
• Foreign individuals and groups can also be found liable for violating export control rules.

The ‘US’ factor

• The economic relationship between Beijing and Washington has been roiled by Trump's unprecedented campaign of tariffs, threats of bans and sanctions on Chinese tech firms.
• With Trump facing a tough re-election campaign ahead of polls next month, US officials have described measures against China as national security safeguards -- prompting a backlash from Beijing.
• In September, China launched a long-expected "unreliable entities list", widely seen as a weapon to retaliate against the US which has used its own "entity list" to shut Huawei out of the US market.
• Beijing's latest measure gives it more room to hit back in US President Donald Trump's war on Chinese tech firms, with the White House moving against popular platforms and major companies -- including apps TikTok and WeChat, tech giant Huawei and chipmaker Semiconductor Manufacturing International Corp.

Implications for India

• The extraterritorial application of the NSL can cast criminal liability on a wide range of individuals and entities.
• Anyone, regardless of nationality or residency, can be prosecuted under the NSL for acts committed inside Hong Kong.
• Such extraterritorial reach of the law can be viewed as unreasonable interference in the domestic affairs of other states.
• India has an extradition treaty with Hong Kong in the form of the 1997 Surrender of Fugitives Offenders treaty.
  • Hong Kong is home to a large Indian community, as well as many Indian professionals who work in the service industry, banking and finance, and shipping.
  • The Indian community in Hong Kong is estimated to be nearly 38,000 (including Indian nationals and those categorised as ‘People of Indian Origin’) and approximately 32,000 hold Indian passports.
  • Hong Kong has also emerged as a popular destination for Indian students pursuing higher studies.
    • In 2018, the number of Indian students in Hong Kong crossed 1,100. Indian citizens also take part in student and faculty exchange programmes and joint research activities carried out by Indian and Hong Kong educational institutions.
  • In this context, India can consider if it wants to alter its visa, migration and residence policy for Indian nationals traveling to Hong Kong for work or other reasons.
  • India could also re-examine its extradition arrangements, in line with the reasoning adopted by other countries.
    • Australia, Canada, France, Germany, New Zealand and the United States—have announced a suspension or termination of their extradition treaties with Hong Kong.
      • This will enable countries to refuse requests to extradite foreign nationals to China, if they have flouted the NSL through their actions, activities and statements.
    • If India does suspend its treaty, it would amount to a conclusive positioning on where New Delhi stands on the NSL.