China's Revised Foreign Trade Law Takes Effect, Emphasizing National Security and Trade Facilitation

New Era for China's Foreign Trade

China's revised Foreign Trade Law officially came into effect on March 1, 2026, marking a significant update to the nation's trade regulatory framework. Passed by the National People's Congress Standing Committee on December 27, 2025, the new law is the first major overhaul in over two decades, following its initial enactment in 1994 and a previous revision in 2004. The comprehensive amendments aim to adapt China's trade policies to a complex global economic landscape, with a strong emphasis on national interests and aligning with high-standard international economic and trade rules.

Strengthening National Interests and International Alignment

A core aspect of the revised law is its explicit incorporation of provisions safeguarding national sovereignty, security, and development interests. This represents a strategic shift, coordinating trade policies more closely with broader national objectives. The legislation also underscores China's commitment to actively align with high-standard international economic and trade rules and to participate more robustly in the formulation of global trade regulations. This includes efforts to deepen reform and expand high-level opening-up amid an increasingly volatile global trade environment.

Enhanced Intellectual Property Protection and Trade Facilitation

The updated law introduces substantial changes to enhance the foreign trade environment, particularly concerning intellectual property (IP) and trade facilitation. Key provisions include:

• Strengthened IP Protection: The law clarifies that China will strengthen intellectual property protection related to foreign trade, enhancing the compliance and risk response capabilities of foreign trade operators regarding IP rights. It also expands the law's scope to include IP-related trade practices and explicitly targets licensing behaviors such as portfolio bundling and restrictive clauses tied to standard-essential patents, labeling them as risks to the foreign trade order.
• Cross-border Financial Services: Measures are included to promote the development of a more robust cross-border financial services system.
• Digital Trade Infrastructure: The law advances international mutual recognition of digital certificates and electronic signatures, facilitating the digital transformation of trade processes.
• Green Trade Standards: Provisions support the development of product standards, certification, and labeling systems related to green trade.
• Talent Development: The law also supports the development of a skilled foreign trade talent pool.

Expanded Countermeasure Toolkit and Digital/Green Trade Focus

In response to rising global protectionism and trade friction, the revised law significantly expands China's legal toolkit for countering foreign sanctions and trade disputes. It grants broader discretion for trade regulators to adopt countermeasures, including authorizing trade-related countermeasures against non-Chinese entities and individuals who discontinue 'normal transactions' with Chinese companies. Furthermore, the law formalizes the 'Negative List' system for cross-border trade in services, clarifying restricted sectors and encouraging various modes of service trade. The legislation also promotes the development of digital and green trade, encouraging technological application in trade, electronic documents, and building digital trade governance and green trade standards. The newly revised law now consists of 11 chapters, reflecting the growing complexity and strategic importance of China's role in global trade.