China Tightens Its Trade Regime as National Security Becomes Central to Foreign Trade Law

The revised law strengthens the government’s authority to impose trade restrictions on goods, technologies, services, and entities deemed to threaten national security or public interest. This includes clearer legal backing for export controls on sensitive technologies such as semiconductors, advanced manufacturing equipment, and dual-use items with military or strategic applications. The amendments also provide legal consistency with China’s existing framework of national security, data security, and anti-foreign sanctions laws, creating a more cohesive and enforceable regulatory system.

One of the most significant implications is the increased discretion granted to regulators. Authorities can now intervene more proactively in trade activities involving critical resources, emerging technologies, and strategic industries. This move reflects lessons drawn from recent global disruptions, including export bans imposed on China by foreign governments and the weaponization of supply chains. By codifying national security language into trade law, Beijing aims to reduce legal ambiguity while enhancing its ability to respond quickly to external economic pressure.

For foreign businesses operating in or trading with China, the revisions introduce new layers of compliance risk. Companies may face expanded licensing requirements, enhanced scrutiny of cross-border transactions, and greater uncertainty around policy enforcement. While the law does not explicitly target foreign firms, its broad definitions and flexible enforcement mechanisms could lead to uneven application across industries. Multinational companies are likely to reassess supply-chain exposure, technology transfers, and long-term investment plans as regulatory predictability becomes more closely tied to geopolitical dynamics.

At a macro level, the amended law underscores China’s shift toward a security-first economic governance model. Rather than retreating from global trade, Beijing is seeking to reshape participation on its own terms, prioritizing resilience, self-reliance, and strategic autonomy. While this approach may protect China from external shocks, it also risks deepening fragmentation in the global trading system. The revisions signal that trade, once a bridge between economies, is increasingly becoming a frontline arena in strategic competition.