China has approved important changes in its foreign trade law amid increasing global pressures and changing business conditions. The changes, passed on December 27, aim to strengthen China’s ability to fight trade wars, increase controls on exports of sensitive products like strategic minerals, and further open up its nearly $19 trillion economy.
According to government news agency Xinhua, these new changes will come into effect from March 1, 2026. This step has been taken at a time when China is trying to reduce its dependence on America and strengthen its position in global trade.
China, the world’s second largest economy, is also making changes in its trade-related laws so that it can become eligible to join a large trade group in the trans-Pacific region. This group was created to balance the growing influence of China. Beijing is trying to prove that it deserves to be a part of this trade platform.
China first enacted the Foreign Trade Law in 1994 and it has been amended three times since it joined the World Trade Organization (WTO) in 2001. It was last changed in 2022. This law gives China the right to retaliate against countries that try to restrict its exports. Under this, some restricted areas can be opened to foreign companies through measures like ‘negative list’.
The new amendment also adds that foreign trade should “serve national economic and social development” and help China build a “strong trading nation.” According to Xinhua, this change further strengthens China’s legal framework to deal with external challenges.
This time the focus of the amendment is on provisions related to digital and green trade, as well as intellectual property. These are areas in which China can improve to move closer to the standards of the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP). In contrast, the focus of the 2020 amendment was on trade defense measures following the tariff war with the US.
Experts say that China has made the language of its rights more clear, so that possible lawsuits filed by private companies can be dealt with. The role of private companies is continuously increasing in China, due to which the government has to keep pace with them.
A diplomat from a Western country who has worked with China for decades told news agency Reuters that the Chinese government has become more cautious about criticism of the private sector. According to him, “China considers itself a country with the rule of law. The government can stop a company’s shipment, but it is necessary to give a solid reason for this.” He said that it is better to have everything clear and in writing.
In recent months, many private export companies of China have also been in the global headlines. In November, the French government started the process of banning the Chinese e-commerce platform Shein. Sheen was accused of selling ‘child-looking sex dolls’ in France.
Additionally, the Chinese government may face confrontation with private companies in the future after implementing comprehensive restrictions. For example, private companies may have conflicting interests over decisions such as a blanket ban on Japanese seafood items. Diplomats say tensions continue between China and Japan over issues like Taiwan and trade.
Also read- India will break all FDI records in 2026! Mega deals and strong fundamentals will be the big reason
Disclaimer: The views and investment advice given by experts/brokerage firms on Moneycontrol are their own and not those of the website and its management. Moneycontrol advises users to consult certified experts before taking any investment decision.