China’s New Trade Law Boosts War Readiness
On Saturday, China enacted revisions to a significant piece of legislation designed to enhance Beijing’s capacity to conduct trade wars, restrict outbound shipments ranging from strategic minerals to sex dolls, and further liberalize its $19 trillion economy. The most recent amendment to the Foreign Trade Law, sanctioned by China’s highest legislative authority, is set to come into force on March 1, 2026, as reported on Saturday. The world’s second-largest economy is reforming its trade-related legal frameworks in part to persuade members of a significant trans-Pacific trade bloc, established to counter China’s expanding influence, that the manufacturing powerhouse merits a place at the table, as Beijing aims to lessen its dependence on the US.
Adopted in 1994 and revised three times since China joined the World Trade Organisation in 2001, most recently in 2022, the Foreign Trade Law empowers policymakers to respond to trading partners that attempt to limit its exports and to implement mechanisms such as “negative lists” to allow foreign firms access to restricted sectors. The revision additionally incorporates a provision stating that foreign trade should “serve national economic and social development” and assist in establishing China as a “strong trading nation,” according to Xinhua. The report states that it “expands and improves” the legal toolkit for addressing external challenges. The revision emphasizes aspects like digital and green trade, as well as intellectual property provisions, which are essential enhancements China must undertake to align with the standards of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This shift in focus contrasts with the trade defense tools that the 2020 revamp concentrated on after four years of tariff conflict with the initial Trump administration.
Beijing is refining the language surrounding its authorities in preparation for possible legal challenges from private companies, which are gaining prominence in China, as noted by trade diplomats. “Ministries have become more concerned about private sector criticism,” said trade diplomat. “China is a rule-of-law country, so the government can stop a company’s shipment, but it needs a reason.” It is not entirely devoid of law here. “Better to have everything written out in black and white,” they added, requesting anonymity, as they were not authorized to speak with media.
In November, China’s private exporting firms garnered international scrutiny following the French government’s decision to suspend the Chinese e-commerce platform Shein. This action came in response to a controversy surrounding the sale of childlike sex dolls on its marketplace in France. The Chinese government may increasingly encounter conflicts with private enterprises while attempting to implement extensive bans, such as Beijing’s prohibition of all Japanese seafood imports, as the top two economies in Asia continue their dispute over Taiwan, according to trade diplomats.
