New regulations on industrial and supply chain security have been introduced, with scientific countermeasures set in place

Maintaining the security of the industrial and supply chains has been guaranteed by the rule of law.  

This is the first special administrative regulation in China to maintain the security of the national industrial chain and supply chain, which is of milestone significance.

The Regulations adhere to the coordinated development and security, focusing on key areas related to economic and social stability and national security, industrial chain and supply chain security, and building relevant systems through "small incisions". Establish a sound mechanism for industrial chain and supply chain security, strengthen risk warning and emergency management, clarify the investigation system, countermeasures, and extraterritorial application regulations for industrial chain and supply chain security.

Wang Minghui, Director of the Second Research Office of the Industrial Economics Research Department of the Development Research Center of the State Council, stated that the promulgation of the "Regulations" is an important measure to effectively prevent and resolve security risks in the industrial chain and supply chain, enhance the resilience and security level of the industrial chain and supply chain, and is also a key step for China to respond to containment and containment by the United States and the West, actively plan the international space, and shape the external environment.

Fill the legislative gap

The Third and Fourth Plenary Sessions of the 20th Central Committee of the Communist Party of China have made arrangements for improving the resilience and security level of industrial and supply chains. Although China's current laws and regulations have relevant provisions in emergency support, export control, countermeasures, etc., there is no specialized legislation on industrial chain and supply chain security.

The Ministry of Justice stated that in order to enhance the resilience and security level of the industrial chain and supply chain, ensure that China's industrial chain and supply chain can effectively respond to internal and external risks, maintain stability and smoothness, it is necessary to fill the legislative gap and further strengthen the legal guarantee of industrial chain and supply chain security.

Currently, the global economic landscape is undergoing profound adjustments, the game between major powers is intensifying, geopolitical conflicts are prone to occur frequently, and the development of China's industrial and supply chains is facing profound changes in both internal and external environments, with various risks and challenges intertwined and overlapping.

Wang Minghui stated that although China currently has the most complete range of industries and strong industrial supporting capabilities in the world, some key core technologies are still subject to human control, and there are still breakpoints and blockages in key components, basic materials, high-end equipment and other fields. The economic cycle is not yet smooth enough, and the upstream and downstream coordination of the industrial chain is insufficient. Some links have weak risk resistance capabilities. These issues urgently need to be regulated and resolved through legal means.

Wang Minghui pointed out that the national level introduction of regulations on industrial chain and supply chain security is an important measure to solve the bottlenecks and pain points of China's industrial chain and supply chain, fill the gaps in legal protection, and prevent and resolve major risks. One is the urgent need to solve the bottleneck problem and ensure the safety and controllability of the industry; The second is to prevent and resolve risks in the industrial and supply chains, and to provide institutional guarantees for maintaining industrial stability; The third objective requirement is to fill the gaps in the rule of law and improve the security mechanism of the industrial and supply chains.

In response to the core technology bottlenecks in key areas such as integrated circuits and industrial mother machines in China, the "Regulations" require the development of a list of key areas, physical and capability reserves in key areas, increased research and development efforts in technology, equipment, and products, and improved risk resistance capabilities in the industrial and supply chains of key areas. This institutional arrangement can guide various resources to gather in key areas and promote decisive breakthroughs in key core technology research and development.

In response to the risks faced by China's industrial and supply chains, such as supply disruptions, price fluctuations, and logistics disruptions, the "Regulations" establish a risk monitoring system and emergency management system for industrial and supply chains, identify industrial and supply chain risks, issue timely warning information, take emergency response measures such as emergency dispatch and use of reserves, quickly respond to sudden risks, and ensure stable and smooth industrial and supply chains in key areas.

Preventing industrial and supply chain risks is a common challenge faced by both governments and enterprises. The Regulations not only clarify the risk prevention measures taken by government departments, but also encourage and support enterprises to explore diversified supply channels, carry out industrial chain and supply chain cooperation, participate in market competition fairly, and enhance the level of preventing industrial chain and supply chain security risks.

Establishing scientific countermeasures

In recent years, some Western countries have shifted their economic and trade policies from traditional liberalism to unilateralism and trade protectionism, frequently imposing strong interventions on global industrial and supply chains.

Professor Liao Shiping from the Law School of Beijing Normal University pointed out that as a specialized legislation on foreign-related security, the highlight of the "Regulations" lies in the establishment of scientific countermeasures against behaviors that damage the security of China's industrial and supply chains, strengthening the systematic nature of foreign-related security legislation, and further enriching China's toolbox for foreign-related legal struggles.

The Regulation achieves the organic unity of countermeasures in the field of industrial chain and supply chain security with the general provisions of the Anti Foreign Sanctions Law of the People's Republic of China by setting different countermeasures for different entities.

In response to foreign countries, regions, and international organizations violating international law and basic norms of international relations, as well as foreign organizations and individuals violating normal market transaction principles and damaging the security of China's industrial and supply chains, Article 14 and Article 15 of the Regulations respectively provide specific countermeasures, such as prohibiting or restricting the import and export of relevant goods, technologies, or international service trade, and charging special fees; Prohibit or restrict foreign organizations and individuals from engaging in import and export activities related to China, prohibit or restrict their investment within China, prohibit or restrict organizations and individuals within China from engaging in related transactions, cooperation, and other activities.

Currently, some Western countries are attempting to conduct investigations into the impact on China's industrial and supply chain security through measures such as shortening or even localizing the global industrial and supply chains, in order to promote decoupling and disconnection from China.

Liao Shiping stated that ensuring the security of international industrial and supply chains, enhancing the resilience and security level of domestic industrial and supply chains, and maintaining the stability of China's external development environment have become urgent and important tasks for the construction of foreign-related rule of law. The Regulation incorporates the development and security related goals of the industrial chain and supply chain into the track of the rule of law. By setting scientifically rich countermeasures, it strengthens the legal protection of industrial chain and supply chain security, enhances the scientificity and effectiveness of foreign-related security legislation, responds to the practical challenges of global industrial chain and supply chain reconstruction, and effectively promotes the realization of a virtuous governance cycle of "ensuring development with security and promoting security with development".