China's Proposed Export Control Law—a Major New Weapon in the Sino-US Trade Dispute

News of foreign investment blocks and punitive tariff measures between the United States and China certainly dominate the headlines. These are, however, merely small skirmishes in a much larger battle.  The primary ground for which each side is fighting relates to technology. Not specifically China's practices as to the protection of intellectual property, which is the stated rationale for the Section 301 tariff measures imposed by the U.S.—but rather the strategic control of competitive advantage in and access to technology globally.

The United States has long had an export control regime that regulates trade worldwide in goods which may contain U.S.-origin technology subject to the Export Administration Regulations even beyond the US border. China may soon be entering this particular fight more directly.

China's Draft Export Control Law: A Game Changer

The Ministry of Commerce (MOFCOM) of the People's Republic of China published a draft Export Control Law for public comment on June 16, 2017. If enacted, the China's new Export Control Law will be the first comprehensive and unified export control legislation in China, which is aimed at upgrading the country's existing regime consisting of various disparate administrative regulations and internal circulars.

In March of this year, the State Council issued its legislative proposal for 2018. Among the proposed bills for submission to the Standing Committee of the National People's Congress this year is the Export Control Law. There is no guarantee that this bill will be passed into law this year but it is high on China's priority list and is widely expected to be enacted within the calendar year.  We therefore examine more carefully the key provisions of the draft Export Control Law.