China has approved sweeping changes to its Foreign Trade Law, adding a new chapter on intellectual property enforcement and granting trade authorities broader powers to sanction violations. The revised law, passed Saturday by the Standing Committee of the National People’s Congress, takes effect March 1, 2026.
The update expands the law’s scope beyond goods and technology to include services and IP-related trade practices. For the first time, the law explicitly targets licensing behaviours such as portfolio bundling and restrictive clauses tied to standard-essential patents, labelling them as risks to the foreign trade order.
The Ministry of Commerce will lead enforcement, a shift that could create a mechanism similar to U.S. Section 337 investigations, allowing China to impose trade sanctions for IP infringements. Officials say the move strengthens China’s ability to respond to unfair practices abroad and protect domestic innovation.
Other provisions reinforce compliance reviews for trade-related policies, promote digital and green trade, and support small businesses and underdeveloped regions. The law also toughens penalties for smuggling, tax fraud and unfair competition, including denying customs clearance or banking services for serious violations.
First enacted in 1994 and last revised in 2022, the Foreign Trade Law now positions China to integrate more deeply into global trade systems while asserting greater control over IP disputes. Analysts say the changes could reshape enforcement dynamics and give Beijing new leverage in trade negotiations.
The original article in Chinese is here.
- Cathy Li
