China eyes cross-border corruption law. Will it blunt the ‘long arm’ of the West?

China's top legislature, the National People's Congress (NPC), has announced plans to enact a dedicated cross-border anti-corruption law in 2026. The legislation, detailed in the NPC Standing Committee's work report, will be drafted by the country's highest anti-graft body, the Central Commission for Discipline Inspection. While a specific timeline wasn't provided, the move follows years of planning, with the law first listed as a legislative priority in 2023 and endorsed by the Communist Party's Central Committee in 2024. The initiative comes on the heels of significant enforcement success; Chinese courts reported recovering and confiscating 18.14 billion yuan (US$2.63 billion) in illegal gains last year through international efforts to hunt down corrupt officials who had fled overseas.

Analysts suggest the law serves a dual purpose: formally extending China's domestic anti-corruption campaign, known as the 'Sky Net' operation, to overseas business activities, while also creating a legal framework to protect Chinese companies from foreign legal overreach. The legislation specifically targets fugitives, illicit assets abroad, and corruption involving overseas businesses. By establishing its own legal standards and enforcement mechanisms for cross-border conduct, China aims to blunt the effect of what it terms the 'long-arm jurisdiction' of Western nations, potentially allowing it to challenge extraterritorial applications of foreign laws, such as U.S. sanctions or anti-bribery statutes, that have increasingly ensnared Chinese firms in recent years.