Contesting Regulatory Authority

China's Blocking Order and the Transformation of Global Economic Governance

Abstract

The growing use of economic regulation as an instrument of geopolitical competition has transformed the contemporary global economy. This article examines China's Blocking Order issued by the Ministry of Commerce (MOFCOM) in May 2026 in response to US secondary sanctions targeting Chinese refineries importing Iranian oil. It argues that the measure represents not merely retaliation but the operationalization of a broader institutional strategy to challenge the regulatory authority underpinning the global economic order. Drawing on the literature on structural power, international authority, institutional change, and weaponized interdependence, the article shows how China's approach reflects a shift from economic adaptation to institutional contestation. It introduces the concept of the contestability of regulatory authority to explain how competing regulatory frameworks reshape the behavior of governments, multinational firms, and financial institutions. The article concludes that the emergence of multiple centers of regulatory authority is becoming a defining feature of the evolving global economic order, with significant implications for global economic governance and the strategic choices of middle powers.