The adoption of a law on foreign state immunity is a major step in safeguarding national sovereignty and security, and also the latest achievement in enriching its legislative toolkit of external affairs, China's top legislature said.

The law was adopted by the Standing Committee of the National People's Congress, the country's top legislative body, on Friday when it wrapped up a session, and will take effect on Jan 1.

"This law is based on China's national conditions and practical needs, and its formulation process also drew reference from relevant international treaties and common international practices," the NPC Standing Committee's Legislative Affairs Commission said in a statement.

While introducing the basic content of the law, the commission also pointed out that the legislation is to serve China's high-level opening-up, advance its construction of the Belt and Road Initiative and protect legitimate rights of Chinese people and enterprises.

The 23-article law clarifies that China's policy on foreign state immunity is limited immunity, stating that Chinese courts, in principle, do not exercise jurisdiction over foreign countries and their assets.

But it also stipulates some exceptions, such as lawsuits arising from commercial activities or the performance of labor contracts.

"On the whole, the provisions concerning the circumstances in which our courts can exercise the jurisdiction over foreign nations and their assets are relatively strict and specific," the commission said, adding "they're generally consistent with relevant international treaties and internationally accepted practices".

It stressed that the law upholds sovereign equality and promotes friendly exchanges with other nations, underscoring "China's system of foreign state immunity is fundamentally different with that of some countries that wantonly expand jurisdiction or engage in so-called long-arm jurisdiction."

Reciprocity is an important principle highlighted in the law, as it is to ensure equal or non-discriminatory treatment between countries in a certain aspect, as well as realizing mutual respect and benefit between the countries, it said.

"But in the event that a foreign state deprives, restricts or reduces the immunity granted to China, we have the right to take necessary countermeasures, such as adjusting our jurisdiction over civil cases involving the state and its assets, so as to safeguard our national sovereignty, security and development interests," it added.

For meeting challenges and guarding against risks over the past few years, China has intensified its efforts in external-affairs-related legislations.

On June 28, for example, the NPC Standing Committee passed the Law on Foreign Relations, showing that China's core interests allow no infringement and its sovereignty and territorial integrity brook no violation. The law has taken effect on July 1.

In June 2021, the country had also seen a law on countering foreign sanctions, which came into effect immediately after NPC Standing Committee's adoption.