China Revises Foreign Trade Law

Effective March 1, 2026, the updated law for the first time elevates "safeguarding national sovereignty, security, and development interests" to a core principle, shifting the balance from solely promoting trade to coordinating it with national security. This revision, passed on December 27, 2025, by the National People's Congress Standing Committee, represents the first systematic overhaul of the law since 2004. The revision significantly expands China's legal toolkit for countermeasures against foreign restrictions. It authorizes restrictive measures against overseas entities and individuals who endanger China's sovereignty or security, or who discontinue "normal transactions" with Chinese organizations, harming their legitimate interests. For the ICT sector, the law introduces a new chapter on intellectual property protection in foreign trade. It explicitly targets licensing behaviors such as portfolio bundling and restrictive clauses tied to standard-essential patents (SEPs), labeling them as risks to the foreign trade order. The Ministry of Commerce will lead enforcement, creating a mechanism that some analysts compare to the U.S. Section 337 investigation process. The law also adds dedicated provisions to promote digital and green trade. It encourages the use of electronic documentation, supports the international mutual recognition of digital certificates, and aims to establish governance systems for digital trade, a sector where China's exports hit US$793.7 billion in 2024.