New Delhi (ABC Live): The next major confrontation between the United States and China may not begin with missiles. Instead, it may begin with banks, insurers, shipping documents, chip export controls, oil tankers, ports, payment systems, and legal notices.
Taiwan is usually discussed as a military flashpoint. However, for Beijing, Taiwan is also a sanctions scenario. China has watched the Western response to Russia after Ukraine very carefully. It saw how quickly the United States and its allies could freeze assets, restrict banks, pressure multinational companies, block technology access, and weaponise financial networks.
Therefore, China’s central question is no longer only whether sanctions may come after a Taiwan crisis. The real question is whether Beijing can survive, delay, dilute, and politically counter those sanctions when they arrive.
Why the May 2, 2026 Order Matters
This is where the May 2, 2026 blocking order becomes important. On that day, China’s Ministry of Commerce issued an injunction to block US sanctions against five Chinese oil refineries accused of buying Iranian oil. The named entities included Hengli Petrochemical (Dalian) Refinery and four independent “teapot” refiners: Shandong Jincheng Petrochemical Group, Hebei Xinhai Chemical Group, Shouguang Luqing Petrochemical, and Shandong Shengxing Chemical.
At first glance, the dispute looked limited. It involved Iranian crude, five refineries, and US secondary sanctions. Yet, the strategic meaning was much larger. China was not merely defending five refiners. Rather, it was testing whether Chinese domestic law could act as a shield against American sanctions power. The May 2 order as the moment when China’s dormant 2021 blocking statute “woke up.”
In simple terms, Beijing used Iran as a rehearsal. Meanwhile, Taiwan may become the real examination.
The Real Power Behind US Sanctions
For decades, US sanctions power has rested on one simple fact: most global finance, trade settlement, marine insurance, shipping, and corporate risk management still touch the US dollar system.
As a result, even non-American firms often obey US sanctions because they fear losing access to dollar clearing, US markets, correspondent banking, or Western financial networks. This is the practical strength of American “long-arm jurisdiction.” It does not need to control every country directly. Instead, it controls the routes through which money, goods, insurance, and risk move.
Therefore, China is trying to make sanctions slower, more expensive, less automatic, and legally risky for companies that operate inside China.
China’s Counter-Sanctions Strategy
China cannot replace the dollar system in one stroke. Moreover, it cannot fully protect every Chinese bank, shipping firm, technology company, or energy importer from Western sanctions.
Nevertheless, Beijing is building a layered defence. First, it is building a legal shield through blocking rules and counter-sanctions laws. Second, it is building financial buffers through foreign exchange reserves, RMB settlement, and alternative payment channels. Third, it is building energy cushions through crude stockpiles and sanctions-risk oil routes. Finally, it is using China’s manufacturing centrality as leverage, because China is far more embedded in global trade than Russia was.
Therefore, the May 2 order should not be read as a narrow Iran-oil dispute. It was a controlled test of the tools China may deploy if Taiwan becomes the trigger for a larger sanctions war.
Why China’s 2021 Blocking Rules Matter
China issued the Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures in January 2021. These rules apply when foreign legislation or measures unjustifiably restrict Chinese citizens, legal persons, or organisations from conducting normal economic and trade activities with a third state or region.
In simple words, China says:
If a foreign country tries to force Chinese companies to obey its sanctions outside that foreign country’s own territory, China can block that pressure through Chinese law.
Consequently, the 2021 rules are not just legal paperwork. They are part of China’s preparation for a future sanctions confrontation.
Table 1: China’s Counter-Sanctions Architecture
| Layer | Instrument | What China Is Preparing | Taiwan-Crisis Use |
|---|---|---|---|
| Legal | 2021 Blocking Rules | Blocks foreign sanctions China considers unjustified | China may order firms not to comply with US Taiwan-related sanctions |
| Legal | Anti-foreign sanctions framework | Enables retaliation against foreign sanctions actors | China may target firms, banks, insurers, lawyers, or officials |
| Financial | RMB settlement | Reduces total dependence on dollar channels | Selected trade may continue if dollar access faces pressure |
| Financial | CIPS and RMB payment channels | Supports non-dollar payment infrastructure | Some cross-border payments may shift into RMB channels |
| Energy | Crude inventories | Creates a buffer against shipping or payment disruption | China can absorb the first shock of energy pressure |
| Trade | Manufacturing centrality | Raises the cost of isolating China | China can create counter-pressure on sanctioning economies |
What the table shows: China is not building one single anti-sanctions weapon. Instead, it is building a system. The legal layer creates resistance. The financial layer creates alternatives. The energy layer buys time. At the same time, the trade layer raises the cost for any coalition trying to isolate China.
May 2, 2026: The First Serious Test
On May 2, 2026, China blocked US sanctions against five Chinese refiners. Reuters reported that China’s Ministry of Commerce issued an injunction prohibiting Chinese entities from recognising or complying with those US sanctions. Importantly, the order came less than two weeks before Trump’s Beijing visit, which made the timing strategically sensitive.
The US Treasury had sanctioned Hengli Petrochemical (Dalian) Refinery on April 24, 2026, alleging that it purchased Iranian petroleum through an oil terminal controlled by Iran’s Revolutionary Guard Corps-Qods Force. Treasury also issued a wind-down licence for transactions involving Hengli.
Therefore, Beijing’s response was not only a legal reply. It was also a signal that China would not accept every US secondary sanction as an unavoidable commercial fact.
Table 2: Why the May 2 Blocking Order Matters
| Fact | Detail | Strategic Meaning |
|---|---|---|
| Date | May 2, 2026 | China activated a previously dormant legal weapon |
| Trigger | US sanctions over Iranian crude purchases | Beijing challenged US secondary sanctions |
| Named refiners | Hengli plus four teapot refineries | China chose important but limited-risk targets |
| Legal effect | Chinese entities were told not to recognise or comply with US measures | Companies may face conflicting legal duties |
| Strategic message | Iran today, Taiwan tomorrow | Beijing tested tools for a larger future crisis |
What the table shows: The refineries were not the real end point. They were the test ground. In effect, Beijing used a limited case to create a legal precedent.
Trump’s China Visit: Why the Order Became Summit Leverage
The timing of China’s May 2 order was not accidental. It came just before President Donald Trump’s visit to Beijing and turned a sanctions dispute into a summit-level bargaining issue.
On May 15, 2026, Trump said he had discussed the sanctioned Chinese oil refiners with President Xi Jinping during his Beijing visit. He also said he was considering whether to lift the sanctions and would decide within days. Reuters reported that the sanctions targeted Chinese companies accused of buying Iranian oil, including Hengli Petrochemical.
Thus, China did not merely issue a legal protest. It created pressure before the summit. By invoking its blocking statute before Trump reached Beijing, Beijing ensured that the refinery sanctions were not treated only as a technical enforcement matter. Instead, they became part of high-level US-China bargaining.
In simple words:
China used law before diplomacy, so diplomacy had to discuss the law.
More importantly, the Trump China visit showed that China’s blocking statute can operate as a negotiating tool, not only as a domestic legal shield.
Table 3: Trump China Visit and the Sanctions Timeline
| Date | Event | Strategic Meaning |
|---|---|---|
| April 24, 2026 | US sanctioned Hengli Petrochemical over Iranian oil-linked activity | Washington escalated sanctions pressure on Chinese energy-linked entities |
| May 2, 2026 | China invoked its blocking statute against US sanctions on five refiners | Beijing legally challenged US secondary sanctions |
| May 14–15, 2026 | Trump met Xi in Beijing | Sanctions moved into summit-level bargaining |
| May 15, 2026 | Trump said he discussed lifting sanctions on Chinese refiners | China’s legal move gained diplomatic weight |
| After the visit | Trump said he would decide soon on lifting bans | Beijing converted legal resistance into negotiation leverage |
What the table shows: China used the May 2 blocking order to move the issue from compliance desks and legal departments into presidential diplomacy.
Why This Strengthens the Taiwan Argument
The Trump China visit strengthens the Taiwan thesis.
If China can use a blocking order over five refineries to push sanctions into summit-level discussion, then in a Taiwan crisis it may use the same model on a much larger scale.
For example, a future Taiwan-related sanctions package could target Chinese banks, chip companies, shipping networks, insurers, energy imports, state-linked assets, and US multinationals operating in China. In response, Beijing may use blocking orders, counter-sanctions, market-access pressure, and diplomatic bargaining together.
Table 4: How China May Use Summit Leverage After Taiwan
| Taiwan-Crisis Target | Possible US Measure | China’s Possible Summit-Level Leverage |
|---|---|---|
| Chinese banks | Dollar clearing restrictions | Threaten countermeasures against US financial firms in China |
| Chip companies | Export controls and entity listings | Link technology controls with US corporate market access |
| Shipping and ports | Vessel, port, or logistics sanctions | Use logistics disruption as bargaining pressure |
| Energy imports | Sanctions on traders, tankers, refiners | Use oil purchases and supply-chain links in negotiation |
| US multinationals | Compliance pressure to exit China | Create legal uncertainty through blocking orders |
What the table shows: The May 2026 Trump-Xi exchange showed how China may convert sanctions into diplomatic bargaining. Therefore, in a Taiwan crisis, Beijing may try to force sanctions into a wider negotiation over trade, technology, finance, and market access.
Why Taiwan Changes the Scale
A Taiwan crisis would not be a normal regional crisis. Instead, it would connect military risk with finance, semiconductors, shipping, energy, insurance, and global supply chains.
If Beijing moves militarily around Taiwan, the United States and its allies may respond with sanctions similar in ambition to the sanctions used against Russia after Ukraine. However, China is not Russia. China is larger, more central to global manufacturing, more deeply tied to Europe and Asia, and more important to technology supply chains.
Consequently, sanctions against China may be possible, but they would also be costly.
Table 5: Possible US Sanctions After a Taiwan Crisis
| Sanction Target | Possible US Action | China’s Likely Counter |
|---|---|---|
| Major Chinese banks | Restrict dollar clearing or correspondent banking | Promote RMB settlement, use state banks, and impose capital controls |
| Technology firms | Block chips, AI tools, semiconductor equipment, and cloud services | Accelerate self-reliance and retaliate against US technology firms |
| Shipping firms | Target vessels, ports, logistics firms, or maritime insurers | Use domestic insurers, alternative ports, and state-directed shipping |
| Energy imports | Sanction traders, refiners, tankers, and suppliers | Use stockpiles, discounted crude, and non-dollar payment channels |
| Overseas assets | Freeze state-linked assets | Retaliate against foreign assets in China |
| Multinationals | Pressure companies to exit sensitive Chinese sectors | Use blocking orders, market-access pressure, and lawsuits |
What the table shows: A Taiwan sanctions package would likely be broad. It may not target only one sector. Instead, it could hit the full operating system of China’s external economy.
China’s Legal Shield: Blocking and Retaliation
China’s legal shield has two sides.
First, it has a defensive side. The 2021 Blocking Rules allow China to reject foreign sanctions that it considers unjustified. These rules can support prohibition orders and create legal consequences for compliance with foreign measures that Beijing rejects.
Second, it has a retaliatory side. China’s anti-foreign sanctions system allows Beijing to impose countermeasures against foreign actors. Reuters reported that China invoked an anti-sanctions law to counter US blacklisting of Chinese refiners, citing Beijing’s power to retaliate against entities enforcing sanctions it deems unlawful.
Therefore, China is not relying only on diplomatic statements. It is turning geopolitical resistance into domestic legal obligation.
Table 6: China’s Legal Tools Against Foreign Sanctions
| Legal Tool | Main Function | Why It Matters for Taiwan |
|---|---|---|
| 2021 Blocking Rules | Blocks unjustified foreign sanctions affecting Chinese entities | China can declare US Taiwan sanctions invalid inside China |
| Prohibition Orders | Direct Chinese parties not to comply with foreign sanctions | Firms obeying US measures may face legal risk in China |
| Compensation Claims | Allows affected Chinese parties to seek damages | Banks and insurers may face lawsuits in Chinese courts |
| Anti-foreign sanctions framework | Allows countermeasures against foreign actors | Beijing can punish sanctioning individuals or companies |
| Administrative countermeasures | Strengthen enforcement | China gains a wider non-military response system |
What the table shows: China is converting sanctions resistance into a rule-based domestic process. As a result, foreign companies may no longer treat US sanctions compliance as a one-sided legal calculation.
The “Impossible Choice” for Global Companies
The strongest effect of China’s blocking strategy is not direct protection of every sanctioned company. Rather, the strongest effect is uncertainty.
A bank, insurer, trader, logistics firm, or multinational company operating in both the US and China may face a sharp dilemma.
| Choice | Risk |
|---|---|
| Follow US sanctions | Face Chinese legal action, market pressure, or regulatory retaliation |
| Follow China’s blocking order | Face US penalties, dollar restrictions, or secondary sanctions |
This is the Engineered Impossible Choice.
China does not need every company to choose Beijing. Instead, it only needs enough uncertainty to make US sanctions harder to enforce. Once companies must calculate legal risk on both sides, sanctions become slower, more expensive, and less automatic.
China’s Financial Buffer
China’s financial preparation has limits. The dollar remains dominant, and the RMB is still a small global payment currency. However, Beijing does not need full dollar replacement to survive the first phase of a sanctions shock. It needs selective channels, reserves, state coordination, and political control over domestic finance.
China’s foreign exchange reserves stood at US$3.3579 trillion at the end of December 2025, according to SAFE and official Chinese government data. Meanwhile, SWIFT’s RMB Tracker reported that the RMB was the fifth most active currency for global payments by value in January 2026, with a 3.13% share.
Therefore, China cannot yet replace the dollar system. Nevertheless, it can build selected corridors for RMB-denominated trade, especially with countries willing to accept sanctions risk.
Table 7: China’s Financial Buffer
| Indicator | Data Point | Sanctions Relevance |
|---|---|---|
| Foreign exchange reserves | US$3.3579 trillion at end-December 2025 | Gives Beijing short-term financial defence capacity |
| RMB global payments share | 3.13% in January 2026 | Shows limited but usable RMB international role |
| RMB rank in global payments | 5th by value in January 2026 | Indicates selective cross-border function |
| Payment strategy | RMB settlement and alternative channels | Useful in sanction-risk trade corridors |
| Main weakness | Dollar system remains dominant | China cannot fully escape US financial pressure |
What the table shows: China’s financial shield is real but incomplete. In other words, reserves and RMB channels help China manage a shock, but they do not fully neutralise the dollar system.
Energy Security: The Oil Shield
Energy is the most immediate vulnerability in a Taiwan crisis. China remains heavily dependent on imported crude. Therefore, any US-led sanctions campaign may try to pressure oil traders, shipping networks, insurance providers, refiners, and payment routes.
China appears to be preparing for that risk through stockpiling and diversified sourcing. Reuters reported that China imported 557.73 million metric tons of crude oil in 2025, equal to 11.55 million barrels per day, up 4.4% from 2024. December 2025 imports reached 55.97 million metric tons, or 13.18 million barrels per day.
However, the Iran war and Hormuz disruption showed the vulnerability directly. Reuters reported that China’s April 2026 crude imports fell 20% year-on-year to 38.5 million metric tons, the lowest since July 2022. Reuters also reported that China’s reliance on the Middle East, which supplies roughly half of its crude, magnified the impact.
Table 8: China’s Energy Sanctions Insurance
| Energy Indicator | Data Point | Strategic Meaning |
|---|---|---|
| 2025 crude imports | 557.73 million metric tons | China remains highly import-dependent |
| 2025 daily import average | 11.55 million bpd | Energy security is central to sanctions planning |
| December 2025 imports | 13.18 million bpd | China entered 2026 with strong restocking |
| April 2026 crude imports | 38.5 million metric tons | Hormuz disruption exposed vulnerability |
| April 2026 annual decline | 20% year-on-year | A Taiwan-linked sanctions shock could hit energy flows hard |
What the table shows: China is stockpiling and diversifying because it knows energy pressure may become a major sanctions weapon in a Taiwan crisis. Moreover, the Hormuz crisis gave Beijing a real-world warning.
Why Iranian Oil Matters
Iranian oil gives China a sanctions-risk laboratory.
It allows Beijing to test discounted crude purchases, smaller refinery flexibility, payment channels outside normal Western pressure, tanker-risk management, legal resistance to US secondary sanctions, and diplomatic bargaining before a major summit.
Thus, the five-refinery case matters because China tested its blocking order on entities that were important enough to send a message but not so central that Beijing had to expose its largest state-owned energy giants.
Taiwan, Semiconductors, and the Sanctions Multiplier
Taiwan is not only a political dispute. It is also a semiconductor chokepoint. Any conflict around Taiwan would affect AI infrastructure, smartphones, automobiles, telecom, defence electronics, and cloud computing.
TrendForce data reported in 2026 placed TSMC’s 2025 global foundry market share at 69.9%, with revenue of US$122.54 billion. In addition, TSMC projected that the global chip market could reach US$1.5 trillion by 2030, driven by AI and high-performance computing demand.
Therefore, a Taiwan crisis would not remain a local security event. It would become a global technology, sanctions, and supply-chain crisis.
Table 9: Why Taiwan Makes Sanctions Bigger
| Taiwan Factor | Why It Matters |
|---|---|
| Semiconductor centrality | Taiwan is critical to advanced chip manufacturing |
| TSMC’s strategic role | A disruption would affect AI, smartphones, cloud, autos, and defence |
| US-China technology rivalry | Taiwan connects military risk with chip export controls |
| Global supply-chain dependence | Companies worldwide would face shortages and compliance pressure |
| Sanctions escalation risk | Financial sanctions and technology controls may arrive quickly |
What the table shows: Taiwan is not only a military trigger. Rather, it is a sanctions multiplier because it links geopolitics with the world’s most important technology supply chain.
China’s Trade Leverage
China’s greatest difference from Russia is trade centrality.
Sanctioning Russia hurt global energy markets. However, sanctioning China would affect manufacturing, electronics, pharmaceuticals, machinery, rare earth-linked supply chains, consumer goods, green technologies, and industrial inputs.
Eurostat reported that in 2025 the EU exported €199.6 billion worth of goods to China and imported €559.4 billion, leaving a goods trade deficit of €359.8 billion. Therefore, full European alignment with a sweeping China sanctions package would carry high economic costs.
Table 10: China’s Trade Leverage
| Trade Indicator | Data Point | Strategic Meaning |
|---|---|---|
| EU exports to China, 2025 | €199.6 billion | Europe has major market exposure |
| EU imports from China, 2025 | €559.4 billion | Europe depends heavily on Chinese goods |
| EU deficit with China, 2025 | €359.8 billion | Full sanctions alignment would carry economic costs |
| China’s position | Global manufacturing hub | Sanctions would disrupt supply chains, not only China |
| Core leverage | Market access plus supply chains | Beijing can create counter-pressure |
What the table shows: China’s trade centrality does not make sanctions impossible. Nevertheless, it makes them costlier, slower, and politically harder to coordinate.
Comparison: Russia After Ukraine vs China After Taiwan
| Factor | Russia After Ukraine | China After Taiwan |
|---|---|---|
| Global manufacturing role | Limited | Very large |
| Dollar exposure | High | High, but with larger reserves |
| Energy role | Major exporter | Major importer |
| Technology role | Limited outside energy and defence | Central to electronics and supply chains |
| Trade integration | Important but narrower | Systemic and global |
| Sanctions impact | Severe but more containable | Potentially global and inflationary |
| Counter-sanctions tools | Retaliatory and commodity-based | Legal, financial, trade, technology, and market-access based |
What the table shows: The Russia model cannot be copied mechanically against China. China is too embedded in the world economy. Consequently, Washington may impose sanctions, but coalition discipline may be harder to maintain.
The Role of Hong Kong
Hong Kong remains a sensitive bridge between China and the global financial system.
In a Taiwan crisis, Hong Kong could become a key pressure point because it connects Chinese capital, offshore finance, dollar liquidity, banking compliance, and global corporate structures. However, Beijing may also use ambiguity around Hong Kong to preserve flexibility.
If China brings Hong Kong fully inside a blocking order, it may escalate the financial confrontation. On the other hand, if it leaves space for ambiguity, it may preserve a back door for settlement and negotiation.
Therefore, Hong Kong may become both a shield and a vulnerability.
The Global South Angle
China’s anti-sanctions strategy is not only aimed at Washington. It is also aimed at global opinion.
Beijing frames US sanctions as “long-arm jurisdiction.” This phrase matters because many countries in Asia, Africa, Latin America, and the Middle East dislike secondary sanctions even when they do not openly support China.
As a result, if China can present its blocking law as a defence of sovereignty and normal trade, it may gain diplomatic sympathy. This does not mean every Global South country will support Beijing in a Taiwan crisis. However, many may avoid full alignment with US sanctions if the economic cost is high.
Table 11: China’s Likely Messaging After Taiwan
| Chinese Argument | Target Audience | Strategic Purpose |
|---|---|---|
| US sanctions are long-arm jurisdiction | Global South | Build diplomatic sympathy |
| Taiwan is an internal matter | Domestic and international audience | Reject external intervention |
| Sanctions harm global trade | Europe and Asia | Weaken coalition discipline |
| Dollar dominance is being weaponised | BRICS and sanctioned states | Promote alternative systems |
| China will protect lawful trade | Chinese companies and partners | Encourage resistance to US pressure |
What the table shows: China will not treat sanctions only as a legal fight. Instead, it will turn them into a political narrative about sovereignty, development, and economic coercion.
ABC Live Analysis: What Beijing Is Really Doing
China’s strategy is not to defeat US sanctions completely. That is not realistic in the short term.
Instead, Beijing wants to achieve five practical objectives.
First, it wants to delay sanctions impact by using legal uncertainty and administrative control. Second, it wants to reduce dollar dependence in selected high-risk trade channels. Third, it wants to protect energy security through stockpiles and alternative suppliers. Fourth, it wants to raise costs for sanctioning states through supply-chain pressure. Finally, it wants to create political legitimacy for resisting US secondary sanctions.
Therefore, the May 2, 2026 order was not only about Iran. It created a precedent.
Table 12: China’s Sanctions Preparedness Scorecard
| Area | Preparedness Level | Reason |
|---|---|---|
| Legal tools | High | Blocking Rules and anti-sanctions tools are now active instruments |
| Financial resilience | Medium | Large reserves help, but dollar dependence remains high |
| RMB internationalisation | Low to Medium | RMB use is growing but still small globally |
| Energy buffer | Medium to High | Oil stockpiling helps, but import dependence remains large |
| Trade leverage | High | China is central to global manufacturing |
| Technology self-reliance | Medium | Progress exists, but advanced chips remain a vulnerability |
| Diplomatic narrative | Medium to High | Anti-sanctions messaging may appeal to non-Western states |
| Summit leverage | High | Trump-Xi talks showed sanctions can be pushed into top-level bargaining |
What the table shows: China is strongest in law, trade leverage, state coordination, and diplomatic escalation. However, it remains weaker in dollar replacement and advanced semiconductor independence.
Judicial-Style Ratio Box
| Question | Answer |
|---|---|
| What is the core issue? | Whether China is preparing legal and economic tools to resist US sanctions after a future Taiwan crisis. |
| What does May 2, 2026 show? | China used a limited Iran-oil dispute to test its blocking statute. |
| Why does Trump’s China visit matter? | It showed that China can convert a sanctions dispute into summit-level bargaining. |
| Why does Taiwan matter? | A Taiwan crisis could trigger a broad sanctions war involving banks, chips, energy, shipping, and global companies. |
| What is China’s strategy? | Make sanctions slower, costlier, less automatic, and politically contested. |
| What is the key conclusion? | Iran was the rehearsal. Taiwan may be the real test. |
How We Verified
This report relies on official and wire-source material. First, Reuters reports confirmed the May 2, 2026 Chinese blocking order and the May 15, 2026 Trump-Xi discussion on sanctioned Chinese refiners. Second, US Treasury and OFAC material confirmed the April 24, 2026 sanctions action involving Hengli Petrochemical. Third, SAFE and SWIFT data support the financial-resilience section. Fourth, Reuters energy data and Eurostat trade data support the oil and trade tables. Finally, TrendForce-linked reporting supports the semiconductor section.
Conclusion: The Sanctions War Before the War
China is preparing for a Taiwan sanctions crisis before the crisis begins.
The May 2, 2026 blocking order against US sanctions on five Chinese refineries was a signal. On paper, it concerned Iranian crude. In substance, it tested China’s ability to resist US secondary sanctions through domestic law.
Trump’s China visit made the precedent more important. Once Trump discussed the sanctioned refiners with Xi and said he was considering whether to lift the bans, Beijing had proved a strategic point: a blocking order can move sanctions from enforcement files into summit bargaining.
If Taiwan becomes the trigger for a larger confrontation, China will not start from zero. It will begin with blocking rules, anti-sanctions tools, foreign exchange reserves, RMB payment channels, oil stockpiles, trade leverage, and a political narrative against American long-arm jurisdiction.
However, China’s preparation also has limits. The dollar remains dominant. The RMB remains a small global payment currency. Chinese energy imports remain vulnerable. Advanced semiconductor dependence remains a strategic weakness. Moreover, multinational companies may still fear US penalties more than Chinese lawsuits.
Even so, China does not need perfect protection. It needs enough resilience to survive the first shock, enough legal pressure to complicate compliance, enough trade leverage to divide sanctioning coalitions, and enough diplomatic messaging to frame sanctions as economic coercion.
That is the real lesson of the May 2 order.
Iran was the rehearsal. Trump’s China visit turned the rehearsal into bargaining. Taiwan may be the real test.
Also, Read ABC Live Report on US-China relations