Some Chinese state-owned entities backed by the key government agency that oversees major state industrial companies have adopted a controversial defense when they face U.S. lawsuits: You can not touch us because we enjoy sovereign immunity.
Aviation Industry Corp. of China (AVIC), China's biggest state-owned aerospace and defense company, has used the strategy twice, while state-owned China National Building Materials Group Co. (CNBM), a state-owned building products company, successfully used it in a case involving allegations that Chinese-made drywall led to health problems for U.S. homeowners.
China's Foreign Ministry in October complained to the U.S. government over attempts by plaintiff lawyers to serve the drywall lawsuit on the State-owned Assets Supervision and Administration Commission (SASAC), which is responsible for 106 government-owned enterprises with 4.7 trillion yuan ($722 billion) in assets, including CNBM and AVIC. The ministry argued in a diplomatic note that U.S. courts have no jurisdiction over suits against a country's "state-owned properties."