If a military conflict over the Taiwan Strait occurs, in addition to the resulting global instability, a host of complex legal issues will need to be confronted. Supply chain and other contractual relationships will be immediately impacted. Given Russia’s invasion of Ukraine, and the announcement of the “no-limit” close relationship between China and Russia, this eventuality should no longer be viewed as remote or hypothetical. The impact of such a conflict would be further complicated by the ever-evolving situation in Hong Kong, a major center for international finance and disputes resolution. International businesses and their attorneys would be well served by considering now the substantive and procedural challenges these matters present.

Developments in the PRC

Last month, the Chinese Leader Xi Jinping signed into effect a new military order containing regulations which govern the use of the People’s Liberation Army (PLA) in “military operations other than war.” While the full text of the regulations has not been published, according to PRC State media, “the [regulations] will standardize, and provide the legal basis for Chinese troops to carry out missions like disaster relief, humanitarian aid, escort, and peacekeeping, and safeguard China’s national sovereignty, security and development interests.” What caught the readers’ eye is the mentioning of both military operations and the safeguarding of China’s national sovereignty and security. The use of the term “military operation” by Xi coincides with how Russian President Putin described the invasion of Ukraine. In order words, if the PLA were to invade Taiwan or conduct military operations over the Taiwan Strait or the South China Sea, it would not be regarded as an “act of war” from the Chinese perspective, but rather a special military operation entirely within China’s domestic territory aimed “at safeguarding national sovereignty and security.” What’s more, at about the same time, China’s Foreign Ministry announced that the PRC has sovereignty, sovereign rights and jurisdiction over the Taiwan Strait and called it “a false claim when certain countries call the Taiwan Strait international waters.” This further changes the political as well as the legal landscape for companies operating in the Greater China region.

‘Act of War’?