restricted theory of sovereign immunity may be adopted

context: The 'indiscriminate lawsuits' filed by foreign countries and companies against the Chinese government during the epidemic urged authorities to reconsider their stance on state immunity. The adoption of the restrictive approach will provide a more reliable channel for the relief of Chinese enterprises whose interests have been infringed, on and strengthen judicial sovereignty. But at the same time, the risk of overseas SOEs being sued may increase.

The enactment of the Foreign Sovereign Immunity Law is an important step for promoting high-standard opening-up, said Li Qingming 李庆明 Chinese Academy of Social Sciences Research Centre for Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era special researcher. Previously, China had long insisted on the theory of state immunity, which has resulted in domestic and foreign individuals and organisations being unable to resort to Chinese courts and arbitration institutions for the settlement of disputes with foreign states. It has not only affected the development of China's legal services industry but has also hindered the improvement of China's business environment to some extent, according to Li. The draft Foreign Sovereign Immunity Law provides for the restrictive doctrine of state immunity, i.e., a state is not immune from the jurisdiction of a foreign court in respect of commercial activities, which better converge with the rules of the US and EU.

In contrast, Ye Yan 叶研 China National Oil and Gas Exploration and Development Company Ltd. senior economist argued that the adoption of the restrictive approach would not only deprive China of its international discourse power and jurisprudential basis for claiming state immunity overseas but could also saddle the PRC with unnecessary diplomatic disputes.