China Strengthens Export Controls and Proposes New Licensing Rules

China has significantly strengthened its export control framework since 2020 to address evolving international relations and counter foreign policies. This effort has led to a unified legal system governing export lists, policies, and oversight.

KEY LEGISLATIVE UPDATES (2020-2025)

• Export Control Law (2020): Established a comprehensive legal foundation for export controls.
• Provisions on the List of Unreliable Entities (2020): Created a list to restrict or prohibit business with foreign entities that harm China’s interests.
• Anti-Foreign Sanctions Law (2021): Provides a legal basis for countermeasures against foreign sanctions.
• Regulations on the Export Control of Dual-Use Items (2024): A crucial regulation that will be further detailed by the new measures.
• Catalogue of Dual-Use Items and Technologies (2025): Updates the specific items and technologies subject to control.

PROPOSED CHANGES TO DUAL-USE ITEM EXPORT LICENSING

In a major development, on 16 September 2025, the Ministry of Commerce (“MOFCOM”) has published a draft of the New Measures for the Administration of Export Licenses for Dual-Use Items for public comment until October 16, 2025. This draft, which will replace the 2005 text, is a direct response to the new regulations and aims to streamline the licensing process.

KEY CHANGES AND CLARIFICATIONS IN THE DRAFT INCLUDE

• “One License, One Use” Principle: The previous “One License, More Uses” mechanism is canceled, meaning each license can only be used for a single customs clearance.
• “Extended Scope”: The export license also applies to dual-use items transported out of China via postal services, carried abroad in personal luggage, or re-exported.
• Defining “Unauthorized Export”: The draft explicitly defines the “unauthorized export” as any discrepancy between the dual-use items export license and the actual critical elements of the export, such as the controlled items, destination, end-user, or end-use.
• Non-Critical vs. Critical Changes: The draft clearly distinguishes between minor changes (e.g., to non-critical elements) and major changes (e.g., to end-user or destination). Major changes require a new license and temporary suspension of exports.
• Digital Administration: The process for issuing, collecting, and using licenses will now be paperless.
• Extension and Validity: Licenses can now be extended once. The new measures eliminate the previous rule that forced 12-month licenses to expire on March 31 of the following year and be reissued for the remaining period. This change removes an arbitrary and inconvenient annual deadline, providing greater flexibility for license holders.
• Transactions subject to Prior Approval: The new measures provide a non-exhaustive list of cross-border transactions that require prior approval before a dual-use import or export license can be applied for, including the import and export of monitored chemicals, import of commercial cryptographic products, export of nuclear materials and import of radioactive isotopes.

IMPLICATIONS FOR BUSINESSES

Multinational companies operating in China or with Chinese partners, especially those in sensitive sectors or dealing with dual-use items, must monitor these changes closely. The increasingly complex and strict regulations require a proactive approach to managing regulatory and contractual risks.

To avoid unexpected export restrictions, companies should:

1. Stay informed about changes in China’s import and export policies.
2. Monitor updates to control lists, such as the Unreliable Entity List.
3. Familiarize themselves with the new application procedures for import and export licenses to ensure a smooth cross-border business.

The Gide China team remains at your disposal for any legal support.