China’s Trade Controls | FTI Consulting

China’s Trade Controls: The Evolution & Development

Forensic & Litigation Consulting

July 27, 2020


In recent years, China has planned to introduce its export control law, which aims to consolidate and streamline its numerous but discrete export control legislation. Currently, China has no export control enforcement because its export control law is still in draft phase, so there is no requirement for there to be export control compliance work in practice. In fact, many violations are currently occurring out of this misunderstanding of the existing regulations.

Therefore, an understanding of the evolution and development of China’s trade control regime is beneficial as this helps to recognise and control the risks and facilitate trade compliance efforts when conducting business with or within China.

Within the context of dual-use and military transactions, China not only controls the export but also the import. Therefore, the phrase “trade control” is more accurate within a Chinese environment. Whereas “export control” or “strategic control” are the phrases commonly used in other countries or regions.

China has been trading with the rest of the world for a long time. Throughout history, the Silk Road1 in Han Dynasty and the maritime expeditions of Admiral Zhenghe2 in the Ming Dynasty are two of the most commonly known voyages. The latest archeological findings indicate that the exchange of goods, technologies and even human beings between China and the rest of the world might have occurred as early as 200 BC.

Today, China is one of the leading merchandise traders in the world. Therefore, how China regulates and controls its foreign trade has profound implications for others.

The People’s Republic of China was established in 19493, and the development of its trade control regime can be divided into four phases.

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