In a major change from its long-standing position, China’s draft law on foreign state immunity adopts what’s called the restrictive theory. Unlike the absolute theory, which holds that states are absolutely immune from suits in the courts of other states, the restrictive theory holds that states are immune from suits based on their governmental acts but not from suits based on their non-governmental acts (for example, commercial activities).
Here’s the first of two blog posts by transnational litigation expert Prof. William Dodge explaining what’s going on.