What China just did with the blocking statutes against U.S. extraterritorial sanctions sets quite a major precedent, probably the financial equivalent of what happened with rare earths last year (in the sense that this is China taking a major step to push back against a U.S. hostile measure as opposed to taking it on the chin).

It’s a little complex but, to start with, what many people ignore (and will probably be surprised by) is that – by and large – Chinese companies and financial institutions have largely complied with extraterritorial U.S. sanctions.

Anecdotal story on this: I know for a fact, because I personally know the person, that a very famous guy (whose name I won’t reveal but that everyone of you would know) sanctioned by the U.S. was in China recently and tried to exchange money at the counter of a random Chinese bank. Just simply exchange dollars for a Chinese yuan, in mainland China. And he was refused, because he is sanctioned by the U.S. – despite the fact that China as a country has absolutely no problem with the person.

This goes to illustrate just how much goodwill China extended to the U.S. on this – a Chinese bank, in China, refusing to serve someone China has no problem with, just to comply with U.S. extraterritorial sanctions.

It also goes to illustrate why this blocking order marks such a sharp departure.

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