People visit the Smart Vehicle Chain area of the third China International Supply Chain Expo (CISCE) in Beijing, capital of China, July 19, 2025. The 2025 CISCE, scheduled from July 16 to 20, opened to general public on Saturday. (Photo: Xinhua)

Chinese Premier Li Qiang has signed a State Council decree enacting new regulations aimed at safeguarding the country's industrial and supply chains. The rules were released on Tuesday and took effect immediately.

The regulations, laid out in 18 articles, are designed to curb risks, strengthen resilience, and protect both economic stability and national security, according to an official government statement. They come as global supply networks face mounting strain from geopolitical tensions and shifting trade dynamics.

A central feature of the new framework is a mechanism to respond to perceived external threats. The rules establish a security review system and authorize government agencies to investigate risks linked to foreign governments, organizations, or individuals - and to take countermeasures when China's industrial or supply chain security is deemed at stake.

Chinese experts described the regulations as China's first dedicated administrative law on industrial and supply chain security, enriching the country's toolkit in safeguarding its economy. They also said the regulations clearly established the principle of "reciprocal countermeasures" to precisely respond to unilateral bullying. 

These regulations are also a direct response to the US and certain Western countries' over-generalization of so-called national security, including chip bans, technological blockades, and attempts at decoupling and supply chain disruption, Zhang Xiaorong, director of the Beijing-based Cutting-Edge Technology Research Institute, told the Global Times on Tuesday.
The regulations also establish a security investigation and countermeasures mechanism through legislation, granting reciprocal countermeasure authorities such as restricting imports and exports, imposing additional special fees, and adding entities to countermeasure lists. This fundamentally reverses China's passive position and sends a clear signal that bullying in any sector will not be tolerated, said Zhang.

In addition, the regulations clarified two major scenarios for launching security investigations. First, when foreign countries, regions, or international organizations violate international law and basic norms of international relations by imposing discriminatory prohibitions, restrictions, or similar measures against China.

Second, when foreign organizations or individuals violate normal market transaction principles, interrupt normal transactions with Chinese citizens or entities, adopt discriminatory measures, or engage in other acts that cause or threaten substantial harm to China's industrial and supply chain security.

The regulations have revealed how China could react to such behaviors.

Relevant departments of the State Council may, in accordance with established procedures, take corresponding countermeasures, including but not limited to prohibiting or restricting the import and export of relevant goods and technologies, or international trade in services, and imposing special fees. Departments may also prohibit or restrict foreign organizations and individuals from engaging in import and export activities related to China, or from investing in China.

The regulations also established a closed-loop system of "supply chain data sharing, risk early-warning, risk prevention and emergency management." Relevant departments will also establish a list of key areas and conduct dynamic adjustments, so as to maintain the stable and continuous operation of the production and circulation of raw materials, technologies, equipment, and products in key areas.

Clear legal bottom line

The Bloomberg immediately took heed of the development and noted in its report on Tuesday that the new rules give government agencies the authority to start security probes against foreign nations and international organizations if they "adopt discriminatory bans" and other similar measures against China, or if they carry out actions that harm the security of the country's supply chains. 

"Part of the intent is clearly to provide another legal basis for officials to respond to foreign sanctions, export controls or other restrictions on China," Christopher Beddor, deputy China research director at Gavekal Dragonomics, was quoted as saying in the report. "It's part of a broader build-out of laws and regulations that has been underway for years."

The regulations tell foreign countries, enterprises what they cannot do - such as malicious supply cutoffs or discrimination against Chinese companies - which actually helps stabilize market expectations and global supply chain cooperation, Zhang said.

"The regulations serve as a clear warning to certain countries, regions, international organizations, entities, and individuals: Do not attempt to adopt discriminatory measures against China and endanger the security of China's industrial and supply chains in key sectors. Otherwise, China has the right to include the relevant organizations and individuals on its sanction lists or unreliable entity lists," Shi Xiaoli, director of the WTO Law Research Center at the China University of Political Science and Law, told the Global Times on Tuesday.

Shi also pointed out that in terms of extraterritorial application, China has now integrated various tools from its existing policy toolkit. The strength of countermeasures, as well as the breadth and diversity of measures, are unprecedented.

"Previously, China mainly relied on scattered laws such as the Anti-Foreign Sanctions Law and the Export Control Law. The new regulations will act as a package that include previous laws, regulations and measures to safeguard national security in industrial and supply chains," said Zhang.

Zhang also said the term "discriminatory prohibitions and restrictions" fully covers targeted suppression actions such as the US' chip embargo, providing a clear legal basis for China to lawfully implement countermeasures.

"The current industrial and supply chain environment is highly complex, and countries are taking various measures to protect their own chains. For China, a major manufacturing country with a vast market and population, protecting industrial and supply chain security is extremely important," Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday.

Experts also stressed that the new regulations will serve as the security cornerstone for high-level opening-up and international cooperation, as "development and security" will be better balanced.

The Article 2 of the regulations explicitly stated that work shall coordinate development and security, advance high-level opening-up, and promote the stable and smooth functioning of global industrial and supply chains.

"China's reform and opening-up policy will remain unchanged. The country will continue to further expand opening-up and proactively align with high international standards," said Shi.

In fact, China's scientific and technological innovation remains committed to openness and cooperation, a foreign ministry spokesperson said on Thursday.