Chinese lawmakers review revision to Foreign Trade Law

Chinese lawmakers on Monday began reviewing a draft revision to the Foreign Trade Law, which incorporates a series of reform measures into national legislation, the Xinhua News Agency reported. The move will reinforce the legal basis of China's opening-up while protecting national security amid a complex global trade landscape, an expert said.

The draft, consisting of 11 chapters and 80 articles, was submitted to the ongoing session of the Standing Committee of the National People's Congress (NPC) for deliberation, according to Xinhua. It seeks to codify key reform measures — including a negative list system for cross-border services trade — into binding law and ensure their effective implementation.

The draft revision defines its legislative purpose as safeguarding national sovereignty, security, and development interests, and further stipulates that foreign trade should actively support the country's economic and social development, according to Xinhua.

In terms of implementing reform measures, the draft revision stipulates that China will proactively align with high-standard international trade and economic rules and actively participate in the formulation of global trade regulations, the report said.

To further optimize the environment for foreign trade, the draft revision specifies that the state will strengthen intellectual property (IP) protection related to foreign trade, enhance the IP compliance and risk management capabilities of trade operators, and establish trade adjustment assistance to stabilize industrial and supply chains, according to Xinhua.

It also encourages professional service providers to improve service networks and offer high-quality support to trade operators, while setting out provisions for developing diversified mechanisms to resolve foreign trade disputes, the report said.

"The revision consolidates previously scattered legal provisions into a more systematic and structured legal framework, signaling China's commitment to a rules-based free trade and responding to the evolving needs of high-quality growth," said Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.

The negative list model, in particular, is a modern governance tool that enhances transparency and reduces market access barriers, Dong said, adding that the revised law will not only help optimize the domestic business environment but also foster healthy competition between domestic market players and foreign firms.

Notably, the draft introduces tougher countermeasures against foreign individuals or organizations that threaten China's sovereignty, security, or development interests. For example, it allows restrictive or prohibitive actions against foreign individuals or organizations that threaten China's sovereignty, security, or development interests in relation to foreign trade, per the Xinhua report.

"It further specifies that no person or entity may support, assist, or facilitate attempts to evade such measures, with violations subject to legal investigation and penalties," the report said.

Speaking on this move, Dong emphasized that the latest revision marks an important step in aligning with international norms, noting that countermeasures are not unique to China and have long existed within comprehensive legal frameworks in Europe and the US.

"When other countries impose unfair measures that violate trade norms or free trade rules, China's lawful counteractions serve to protect its sovereignty, security, and development interests," he said, adding that including clear provisions on countermeasures into the law is therefore both necessary and justified, especially amid rising global protectionism.

The current Foreign Trade Law of the People's Republic of China was adopted by the 7th Session of the Standing Committee of the 8th NPC on May 12, 1994, and came into effect on July 1, 1994. Over the past 31 years, the law was amended in 2004, and further revised in 2016 and 2022.

In January 2024, the Financial and Economic Affairs Committee of the NPC disclosed that the amendment to the Foreign Trade Law had been included in the legislative agenda of the 14th NPC Standing Committee. The committee recommended that relevant authorities thoroughly consider proposals on the law's revision, intensify their work, and speed up the amendment process, Legal Daily reported at the time.

In September 2024, the Ministry of Commerce, together with relevant departments, released a draft amendment to the Foreign Trade Law for public consultation. The move aimed to deepen reforms in the foreign trade system, steadily expand institutional opening-up, promote the high-quality development of foreign trade, and better safeguard national security, according to a statement by the ministry.

"If implemented, the revised Foreign Trade Law will serve as a cornerstone for China's trade policy in the years to come, facilitating a more integrated, innovative, and secure trading system that will have a positive impact on enforcement, international understanding, and security protection," Dong said.