China’s evolving trade policy landscape presents both challenges and opportunities for businesses worldwide. Two recent developments – amendments to the Counter-Espionage Law and new export control laws on gallium and germanium – could potentially reshape the terrain for companies engaging with China.
- Navigating Uncertain Waters: The Impact of Counter-Espionage Law Amendments
China is heightening its guard against foreign corporate intelligence and due diligence investigations into its domestic firms. Sweeping amendments were introduced to China’s Counter-Espionage Law in April, broadening the definition of espionage activities and bolstering the national security authority’s power to take action against alleged infringers.
This tighter regulatory climate coincides with recent investigations into the Chinese offices of renowned consultancies, like Bain & Company and Capvision. Furthermore, a significant setback for foreign businesses is that key Chinese online corporate information databases such as Wind, TianYanCha, Qichacha, and Aiqicha are now largely inaccessible outside Mainland China. This development increases the challenge for international businesses to ensure their Chinese partnerships comply with strict trade policies of Western countries.
- Restricting Flow of Key Resources: New Export Control Laws
Starting from 1st August, China is set to roll out new export control laws for two rare metals: gallium and germanium. These new rules mandate that Chinese companies wishing to export these vital resources must secure state permission first.
Given China’s dominant position as a supplier, accounting for almost 90% and 70% of gallium and germanium production respectively, this shift is bound to impact the tech sector globally. These metals are integral to creating various key products, including semiconductors, solar cells, and LED displays.
These regulatory changes underline the importance of staying abreast of China’s ever-evolving policy landscape. Access Partnership is working closely with companies globally to manage developments in China and mitigate the risks posed. If you would like to receive a briefing on these issues, please get in touch with us at [email protected].
