China’s new draft law on combating cross-border corruption is as much a weapon against foreign interference as it is a tool against illicit financial flows, analysts say. The draft sets out ways to block extraterritorial investigations and to retaliate against foreign anti-corruption enforcement, drawing a firm legal boundary against foreign jurisdictions while establishing its own mechanism to police overseas assets. In doing so, legal specialists warn, Beijing is also creating a double-edged regulatory framework that will force multinationals and Chinese businesses operating in regional hubs such as Singapore to navigate data compliance dilemmas. The draft Anti-Cross-Border Corruption Law was submitted to the country’s top legislature in late August for its first reading, and the public has until September 26 to give feedback.
Wang Ke, Member of the National People’s Congress’ Standing Committee, said that in the past, provisions covering the corruption had been scattered across the Supervision and Criminal Procedure Laws, complicating asset recovery and procedures for trials in absentia. However, the new draft was a “fundamental law” that integrated prevention, punishment and international cooperation “into a single chain”. The legislation will add another layer to the legal firewall that China has steadily erected over the past five years against perceived Western legal overreach. Ryan Mitchell, Associate Professor of Law at the Chinese University of Hong Kong, said “foreign-related factors in the fight against corruption are on the rise” and “the intertwining of domestic and overseas corruption is intensifying”. “The rising globalization of major Chinese firms makes cross-border corruption an ever more significant issue for Beijing. International perceptions regarding the fairness of Chinese competition, or the benefits of Belt and Road Initiative projects, are also tied to such genuine concerns,” Mitchell said.
To some extent, the draft law resembles some anti-corruption laws in the West, such as the U.S. Foreign Corrupt Practices Act and Britain’s Bribery Act. All three extend anti-corruption jurisdiction beyond domestic borders to target overseas bribery and cross-border commercial misconduct, and put corporate compliance programs, internal accounting integrity, and third-party due diligence at the center of enterprise liability and risk management. However, the U.S. act focuses on bribery of foreign public officials and accounting controls, while the British model establishes broadly framed bribery offenses and a corporate failure-to-prevent offense, according to Wang Jiangyu, Law Professor at City University of Hong Kong.
“The Chinese draft is much more institutionally and politically integrated,” he said. The Chinese bill covers not only outbound bribery but also corruption involving Chinese public officials, state organs and state-owned enterprises (SOEs), overseas misconduct by Chinese public-sector actors, flight by suspected persons, cross-border transfers of corrupt assets, and certain foreign conduct producing effects in China. “Beijing is borrowing some internationally recognizable elements of modern anti-bribery law, but embedding them in a distinctly Chinese model combining punishment, prevention, asset protection, supervisory governance, international cooperation and resistance to what China considers abusive foreign extraterritorial enforcement,” he said.
The Chinese model includes establishing a centralized mechanism led by the National Supervisory Commission (NSC), which comes under the Communist Party’s top anti-corruption body. The Commission will coordinate with a dozen or so state bodies, ranging from public security and finance to the cyberspace administration. “This is important because cross-border corruption cases rarely involve bribery alone. They commonly require the tracing of payments, corporate records, beneficial interests, electronic data and overseas assets,” Wang said.
China’s decision to adopt a framework like the U.S. act carries a touch of historical “irony”, according to Matthew Erie, Associate Professor of Law at the American University Washington College of Law. Erie said that in 2011, then U.S. Department of Commerce General Counsel Cameron Kerry advocated for China to adopt a law equivalent to the American legislation. Beijing responded by amending its Criminal Law that year to criminalize bribes paid to foreign officials, fulfilling its obligations under the United Nations Convention Against Corruption, he said. But those statutory provisions remained dormant for over a decade until October 2023, when a court in Guangzhou enforced them in a landmark case, convicting two former executives of state-owned China Railway Tunnel Group of bribing a government official in Singapore, Erie said. It was a signal that China’s foreign bribery laws were being enforced. What started out as a U.S. effort to encourage trade has become a state-led push to resist Western legal dominance and American long-arm jurisdiction.
Behind Beijing’s legislative shift lies a decade of deep frustration with international legal cooperation. Before turning to a statutory extraterritorial framework, Beijing tried for years to combat cross-border corruption and repatriate fugitives through traditional bilateral diplomacy. At its height, China negotiated 59 bilateral extradition treaties, believing that formal international agreements could serve as the legal backbone for anti-graft campaigns. However, Western skepticism blocked this bilateral framework from expanding where Beijing needed it most. Key Western destinations for fugitives either refused to negotiate bilateral extradition treaties or left signed treaties unratified, the South China Morning Post reports.
