China Revises The Foreign Trade Law: Key Changes And Practical Implications

On 27 December 2025, China passed the revised Foreign Trade Law of the People’s Republic of China (the Revised Foreign Trade Law), which took effect on 1 March 2026.

The Foreign Trade Law sets out the legal framework for the import and export of goods, technologies and services. It states that China will “connect with, participate in and safeguard” international trade rules, and introduces a trade policy compliance mechanism to better align domestic trade measures with international commitments.

Set out below are several key aspects of the revision and their potential implications for businesses engaged in cross-border trade:

1 Import and export of Goods and Technologies

The Revised Foreign Trade Law continues to regulate the import and export of goods and technologies under a “freedom plus regulation” approach. Depending on the nature of the product or technology, trade may fall into three categories: prohibited, restricted, or free import and export. Prohibited items are not permitted to be imported or exported, while restricted items are subject to regulatory measures such as quotas or licensing requirements.

The law introduces a catch-all provision allowing authorities to adopt necessary trade control measures in circumstances not expressly listed in the law. In addition, it expressly authorizes the State to implement necessary trade measures in response to “other emergencies in international relations.”

Practical implication: Companies engaged in cross-border trade are advised to factor national security and geopolitical developments into their transaction planning.

2 Cross-Border Trade in Services

The Revised Foreign Trade Law encourages cross-border trade in services and adopts different regulatory regimes:

• Services provided through cross-border delivery, consumption abroad or the movement of natural persons are subject to a negative list system¹. Sectors not included in the negative list are generally granted national treatment (i.e., the same regulatory treatment as domestic providers). 
• Services provided through commercial presence in China are governed by the Foreign Investment Law and related regulations. In such cases, market access is governed by the Market Access Negative List and the Special Administrative Measures for Foreign Investment Access (Negative List).

Practical implication: Companies providing services across borders should therefore carefully assess their business model and mode of service supply, as different compliance requirements apply. 

3 Trade Countermeasures

The Revised Foreign Trade Law provides a statutory basis for imposing trade countermeasures against foreign individuals or organizations that:

• Endanger China’s sovereignty, security or development interests;
• Violate normal market transaction principles or disrupt normal market order, causing serious harm to the legitimate rights and interests of Chinese individuals or organizations; or
• Adopt discriminatory measures against Chinese individuals or organizations that seriously harm their legitimate rights and interests.

Importantly, the law prohibits any individual or entity from assisting in the evasion of such countermeasures. Prohibited assistance may include logistics, platform services, customs declaration, warehousing, agency or other intermediary services. 

Violations may result in confiscation of illegal gains, fines of up to five times the illegal income and market access bans of up to five years. Criminal liability may apply if the conduct constitutes a crime. 

Practical implication: Companies engaged in cross-border trade are therefore advised to strengthen counterparty due diligence and transaction screening procedures. Businesses should also monitor countermeasure decisions issued by the PRC MOFCOM. Companies may also consider incorporating countermeasure compliance clauses into import and export contracts to manage potential legal and contractual risks.

4 Digital and Green Trade

The Revised Foreign Trade Law supports cross-border e-commerce and foreign trade comprehensive service providers, and encourages digital transformation in trade processes, including the use of electronic bills of lading, electronic invoices and mutual recognition of digital certificates and electronic signatures.

In addition, the law promotes the development of a green trade system, encouraging the import and export of environmentally friendly and low-carbon products and supporting the establishment of relevant standards, certification and labeling frameworks. 

Practical implication: Companies engaged in digital trade should ensure that their operations comply with China’s requirements on data protection, cybersecurity and cross-border data transfers, which are increasingly relevant to cross-border commercial activities.

Footnote

1. The currently applicable measures are the Cross-Border Services Trade Special Administrative Measures (Negative List) (2024 Edition) and the corresponding Free Trade Zone version.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.