A New Era for Trade: Revised Foreign Trade Law Takes Effect March 1

March 1, 2026 - The newly revised Foreign Trade Law of the People's Republic of China (hereinafter referred to as the“Foreign Trade Law”) came into effect today, after undergoing two rounds of deliberation by the Standing Committee of the National People's Congress. Expanded and refined from 69 to 83 articles, the updated legislation reflects broad consensus and is centering on the balance between openness and national security. It consolidates outcomes from foreign trade reform and innovation, aligns more closely with prevailing international economic and trade rules, and thereby provides a reinforced legal foundation foraccelerating China’s transformation into a trader of quality.

This revision marks a significant step in advancing the rule of law amidst profound shifts in the global economic landscape and the accelerated restructuring of international rules. By responding to practical needs, codifying best practices, and improving relevant institutions, the updated law affords stronger legal safeguards for the high-quality development of China's foreign trade in the new era, in response to both the opportunities presented by the rapid growth of cross-border e-commerce, digital trade, as well as green trade, and the challenges posed by the mismatch between new forms and models of foreign trade and traditional regulatory approaches.

Centered on high-quality development, the newly revised Foreign Trade Law features four major institutional innovations: First, strengthening the guiding role of the rule of law to anchor national strategy. The law now explicitly sets out, as its legislative purposes, high-level opening up, high-quality development, and the transformation of China into a trader of quality. It safeguards national sovereignty, security, and development interests, with new provisions introduced on extraterritorial intellectual property protection and trade adjustment assistance, thereby providing legal safeguards for foreign trade enterprises venturing abroad with confidence.Second, aligning with international rules to build competitive advantages. Itformalizesnegative-list system for cross-border trade in services, designates digital trade and green trade as priority sectors, standardizes the regulation of processing trade, and promotes new forms and models of foreign trade in a standardized, well-regulated, and globally oriented manner. Third, safeguarding the security baseline to improve risk prevention and control. The revision sets out clauses such as national security exceptions and trade countermeasures, authorizing the adoption of restrictive measures against foreign entities jeopardizing China's sovereignty, security, or development interests. Furthermore, it also establishes a diversified safeguard mechanism for international transport corridors to enhance the resilience of industrial and supply chains.Fourth, streamlining administration and delegating Power to stimulate market vitality. The law abolishes the prerequisite filing and registration for foreign trade operators, simplifies Customs clearance processes, specifies the responsibilities of Customs authority for domestic sales of processing trade goods and origin determination, and shifts the regulatory focus from ex-ante approval to ongoing and ex-post supervision, thereby reducing regulatory compliance costs.

In Customs supervision, the updated law focuses on end-to-end compliance management. It specifies that foreign trade operators must comply with Customs requirements, standardizes procedures for the domestic sales of processing trade goods, refines the applicable standards for origin determination, and extends tariff quota management from imports to cover both imports and exports. These institutional arrangements not only strengthen the effectiveness of Customs supervision but also enhance trade facilitation, creating a more stable and transparent business environment for foreign trade enterprises.

A review of the legislative history of the Foreign Trade Law shows that each major amendment has marked a firm step in China's opening up and has profoundly driven the transformation of Customs regulatory models.To be specific, the 1994 foundational legislation established the basic institutions and regulatory framework for foreign trade, marking the full integration of foreign trade administration into the rule of law.The first comprehensive amendment to the Foreign Trade Law, enacted in 2004, was undertaken to align with China's WTO accession commitments. It replaced the approval system for trading rights with a registration-based system, shifting the Customs regulatory model from "prior approval" to "registration management".The 2016 amendments removed outdated provisions and harmonized legal language, creating room for further reform.The 2022 amendments deepened reforms to streamline administration, delegate power, and improve regulation and services by deleting the provisions on registration and filing of foreign trade operators as well as the clause denying Customs clearance to goods without such registration. This shift moved the focus of Customs supervision from ex-ante approval to ongoing and ex-post supervision.Building on these foundations, the second comprehensive amendment to the Foreign Trade Law, enacted in 2025, was undertaken against the backdrop of China's push for high-level opening up and its accelerated efforts to turn itself into a trader of quality. It introduced important provisions on digital trade, green trade, trade countermeasures, and supply chain security. Fully in line with high-standard international economic and trade rules, it provided a solid legal foundation for Customs authority to fulfill its dual mandate as both a guardian of the national gateway and a facilitator of opening up in the new era.

The vitality of law lies in its implementation. Therefore, with the implementation of the newly revised Foreign Trade Law, China's foreign trade development is poised to operate within a more robust institutional environment. By balancing development and security, as well as reform and the rule of law, and continuously optimizing its international market positioning, product mix, and tradepatterns, the law is expected to drive the creation of a new foreign trade landscape: one characterized by higher-quality imports and more value-added exports, more intensive and efficient operations, enhanced security, and smoother flows. This will, in turn, provide solid legal support for building a higher-standard open economy and accelerating China's transformation into a trader of quality.