China has passed revisions to a cornerstone piece of its trade legislation, strengthening Beijing’s ability to wage economic retaliation, tighten controls on outbound shipments of sensitive goods, and further open parts of its US$19 trillion economy, state media reported on Saturday.
The amended Foreign Trade Law was approved by China’s top legislative body, the Standing Committee of the National People’s Congress, and will take effect on March 1, 2026, according to the state news agency Xinhua. The overhaul comes as China faces deepening trade frictions with major economies and seeks to reposition itself within global trade architecture amid rising geopolitical competition.
Beijing has been steadily revamping its trade-related legal framework to bolster its defences against what it sees as discriminatory measures by foreign governments, particularly the United States and its allies. At the same time, Chinese officials are keen to convince members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — a major trade bloc originally designed in part to counter China’s growing influence — that the world’s second-largest economy meets the bloc’s high standards and deserves membership.
First adopted in 1994 and revised three times since China joined the World Trade Organization in 2001, most recently in 2022, the Foreign Trade Law gives policymakers broad authority to respond to restrictions on Chinese exports. It allows Beijing to impose countermeasures against trading partners and to use tools such as “negative lists” to clarify which sectors remain closed to foreign participation, while opening others.
The latest revision adds language stipulating that foreign trade should “serve national economic and social development” and contribute to building China into a “strong trading nation”, Xinhua said. It also “expands and improves” the legal toolkit available to authorities to deal with external economic challenges, signalling a more comprehensive and codified approach to trade governance.
Unlike the 2020 and 2022 revisions, which focused heavily on trade defence instruments forged during years of tariff escalation under the first administration of former US president Donald Trump, the new changes place greater emphasis on emerging areas. These include digital trade, green trade, and intellectual property protection — areas that China must strengthen if it hopes to meet CPTPP accession requirements.
Trade diplomats say the revisions also reflect Beijing’s growing sensitivity to legal challenges from its own private sector. As Chinese companies become more globalised and legally sophisticated, ministries are increasingly wary of acting without clear statutory backing.
“Ministries have become more concerned about private sector criticism,” said one Western trade diplomat with decades of experience working on China-related issues. “China is a rule-of-law country, so the government can stop a company’s shipment, but it needs a reason.”
“It’s not totally lawless here. Better to have everything written out in black and white,” the diplomat added, speaking on condition of anonymity as they were not authorised to speak to the media.
Tensions between state policy objectives and private exporters have become more visible in recent months. In November, Chinese e-commerce firms drew international scrutiny after the French government moved to suspend operations of fast-fashion giant Shein in France, following an uproar over the sale of childlike sex dolls on its platform. The incident highlighted the reputational and regulatory risks posed by private Chinese exporters operating in sensitive markets.
Beijing could also find itself increasingly at odds with domestic companies when enforcing sweeping trade bans driven by geopolitical considerations. Trade diplomats point to China’s prohibition on all Japanese seafood imports, imposed amid deteriorating relations over Taiwan and other disputes, as an example where private firms bear significant commercial costs.
As China braces for a more fragmented global trading environment, the revised Foreign Trade Law underscores Beijing’s determination to formalise its powers, balance state control with market forces, and project itself as both a rule-based and resilient trading nation in an era of intensifying economic rivalry.
