Key Points:
- China banned domestic compliance with US sanctions targeting 5 Chinese companies accused of trading in Iranian oil.
- The United States froze corporate assets and blocked financial transactions after adding the firms to a blacklist in 2025.
- Hengli Petrochemical strongly denied the allegations and stated that its crude oil suppliers comply completely with international trade rules.
- One Chinese energy company successfully imported 258,000 metric tons of American propane worth $150 million during the first 4 months of the year.
The Chinese government issued a strict ban on Saturday to protect its domestic businesses. The Ministry of Commerce ordered companies and individuals to completely ignore and block recent sanctions imposed by the United States. These American sanctions target 5 Chinese petrochemical companies. The US government accuses these firms of buying and trading petroleum from Iran.
The conflict escalated rapidly in 2025. United States officials signed executive orders to punish the 5 Chinese businesses. The targeted companies include Hengli Petrochemical (Dalian) Refining Co and Shandong Shouguang Luqing Petrochemical Co. The US government placed these specific firms on its Specially Designated Nationals List. This aggressive move allowed American authorities to freeze corporate assets and ban any international transactions with the blacklisted companies.
Chinese officials quickly fought back against the financial attack. A spokesperson for the Ministry of Commerce stated that the United States violates international law and basic global norms with these one-sided penalties. The spokesperson explained that Beijing designed the new blocking measure specifically to safeguard the legitimate rights of domestic firms and individual citizens. China consistently opposes any country that imposes strict sanctions without the United Nations’ official approval.
The Chinese government used a specific legal tool to defend its companies. Officials approved the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation back in 2021. The Saturday ban represents a direct application of this 2021 law. The ministry official made it clear that this new blocking order targets only the unfair American rules. China will still fulfill its regular international obligations exactly as promised. The government will also continue to protect the legal rights and interests of all foreign companies operating within its borders under Chinese law.
Hengli Petrochemical, the parent company of the targeted Dalian refinery, released a strong public statement last week. The corporate leaders condemned the United States and called the Iran allegations completely groundless. They argued the American government lacks both factual evidence and legal authority to freeze their hard-earned assets.
The petrochemical giant insisted it follows all global trade rules. Executives stated the company has strictly complied with all laws and regulations since the day it opened. They firmly denied ever engaging in any trade with Iran. The company also stated that all its crude oil suppliers provide guarantees confirming that their materials do not violate any active US sanctions.
Financial experts point out how the United States controls global trade. Analysts note that the American government heavily leverages the dominance of its currency to extend its power overseas. American authorities use secondary sanctions to punish foreign entities that do business with blacklisted groups. This strategy serves as a primary tool for the US to influence cross-border commerce and forcefully reshape global supply chains.
Mei Xinyu works as a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing. Mei explained that China maintains a neutral stance regarding external global conflicts. However, the researcher emphasized that Beijing absolutely refuses to tolerate foreign countries infringing on the rights of Chinese citizens and local businesses.
Mei believes the government must respond to external pressures to safeguard national interests. At the same time, the researcher noted that China still wants to maintain a stable and predictable environment for foreign investors. The country plans to keep its doors open to international cooperation despite ongoing trade disputes with Washington.
Ding Rijia teaches industrial economy as a professor at the China University of Mining and Technology in Beijing. Ding views the new ban as a clear sign of strength. He said the policy highlights how China is increasingly using its own legal instruments to block foreign countries from applying their laws outside their own borders.
The professor thinks this move sends a strong signal to the global market. Ding said China demonstrates it can provide a highly predictable legal environment for multinational companies engaged in cross-border trade. He added that the 2021 policy helps reduce compliance confusion for businesses operating in multiple countries. This legal clarity strengthens global supply chains against the rising threat of unilateral financial attacks.
Business leaders rely on this stability to keep trade flowing. Zhang Xin manages customs affairs at Oriental Energy New Material Co, a petrochemical producer located in Ningbo. Zhang stated that a predictable policy environment serves as the absolute foundation for healthy economic relations between China and the United States. His company plans to optimize its supply chains and maintain its American imports. According to Ningbo Customs data, the company successfully imported 258,000 metric tons of liquefied propane from the United States during the first 4 months of this year. This massive fuel shipment cost the company $150 million, proving that normal trade continues despite the political arguments.
