Overhaul of the Basic Law of Foreign Trade, Fixed Reform Achievements to Ensure High Level Opening Up to the Outside World

The 19th meeting of the Standing Committee of the 14th National People's Congress recently voted to pass the newly revised Foreign Trade Law of the People's Republic of China (hereinafter referred to as the "New Law"). The new law will come into effect on March 1, 2026.

As a fundamental law in the field of foreign trade in China, the Foreign Trade Law has undergone a major revision of the current laws. The new law not only fixes multiple effective reform achievements in previous practices in legal form, but also highlights the determination and action to further expand high-level opening up in the field of foreign trade; At the same time, in combination with the current changes in international trade forms, enrich the trade remedy toolbox of foreign trade enterprises, especially small and medium-sized foreign trade enterprises, and increase their ability to resist risks in the process of business development.

The management mode of cross-border service trade has entered the era of negative list comprehensively

The current Foreign Trade Law was implemented in 1994 and underwent a comprehensive revision in 2004. Subsequently, individual provisions were revised in 2016 and 2022 respectively.

Elevating the existing reform measures into a legal system is an important aspect of the comprehensive revision of the Foreign Trade Law this time. The new law consists of 11 chapters and 83 articles, among which Article 31 stipulates: "The state implements a negative list management system for cross-border service trade (hereinafter referred to as cross-border service trade) conducted by overseas service providers through cross-border delivery, overseas consumption, and natural person movement modes

Including cross-border service trade in the negative list management demonstrates China's open attitude towards international service trade, "Tu Xinquan, Dean of the China WTO Research Institute at the University of International Business and Economics, said in an interview with Securities Times reporters.

According to the WTO General Agreement on Trade in Services, international trade in services is divided into four modes: cross-border delivery, overseas consumption, commercial presence, and movement of natural persons. Article 27 of the new law refers to this framework to clarify the four modes of service trade, which are also added to the second review draft of the revised Foreign Trade Law during this revision process.

Tu Xinquan told reporters that cross-border service trade is an important direction for the development of service trade, and the category of "commercial presence" in service trade is actually covered in the negative list management of foreign investment. The so-called 'commercial existence' refers to providing services to China through the establishment of foreign-invested enterprises in the service industry. Previously, the Foreign Investment Law had clearly stated that 'the state implements a pre admission national treatment and negative list management system for foreign investment'.

The attempt to manage the negative list of cross-border service trade began with the pilot project of Hainan Free Trade Port. In July 2021, Hainan Free Trade Port launched the country's first negative list for cross-border service trade; In March 2024, based on preliminary exploration, the Ministry of Commerce formulated and issued two negative lists for cross-border service trade applicable to both the national and pilot free trade zones, marking the first establishment of a negative list management model for cross-border service trade nationwide. The heads of the Service Trade Department and Free Trade Zone Port Department of the Ministry of Commerce pointed out at that time that the first national version of the list had achieved a shift in service trade management from positive list commitments to negative list management, which was itself a major opening measure.

The negative list management model follows the principle of "entry without prohibition" and has higher transparency and certainty. Professor Shi Xiaoli from the School of International Law at China University of Political Science and Law told reporters that the implementation of the negative list management system for cross-border service trade has been elevated to a law, which has improved the stability and authority of policies, increased implementation efforts and supporting system construction, and is more conducive to the implementation of relevant policies.

The establishment of the negative list management system for cross-border service trade from a legal perspective demonstrates China's determination to further expand opening up and provide a clearer legal basis for this system. At the same time, in terms of legality, it will also have better coordination with other relevant laws, "Tu Xinquan further pointed out.

Assist in the development of new models and business models in foreign trade

Strengthening regulations on promoting foreign trade is also an important aspect of the new law revision. On September 8, 2025, during the 17th meeting of the Standing Committee of the 14th National People's Congress, Minister of Commerce Wang Wentao explained the revised draft of the Foreign Trade Law of the People's Republic of China. He pointed out that one of the ideas of the revised draft is to adhere to a systematic approach, which not only takes into account the current reform measures and mature practices in the field of foreign trade as a legal system, but also focuses on the long-term and flexibly designs relevant institutional mechanisms to reserve space for practical development.

This has been reflected in the relevant regulations of green trade. Article 61 of the new law stipulates: "The state shall accelerate the establishment of a green trade system, encourage the import and export of green and low-carbon products, promote the construction of product standards, certifications, and labeling systems related to green trade, and strengthen international cooperation in green trade

Li Fayin, a partner at Beijing Junzejun Law Firm, stated in an interview with Securities Times that the new law has established the strategic position of green trade at the national legal level. In recent years, many countries have introduced various tariff and non-tariff barriers to China's trade in green products such as photovoltaics, electric vehicles, and batteries. The internationalization layout of Chinese enterprises has become a significant trend. The new law timely proposes to strengthen international cooperation in green trade and the construction of product standards, certifications, and labeling systems, providing strategic directions and measures to promote the international layout and development of green trade and break through trade barriers.

Li Fayin believes that promoting the construction of international standards and certification systems for green and low-carbon products at the policy level, and promoting international investment and technological cooperation that is in line with industry development and national strategic interests, should become specific measures under the guidance of foreign trade law.

In fact, the Ministry of Commerce has released the first special policy document in the field of green trade in October 2025. When interpreting the relevant measures in the document, Li Chenggang, the representative and deputy minister of the Ministry of Commerce for international trade negotiations, stated that we will continue to align with international standards and economic and trade rules, promote further reforms in areas such as environmental standards, and promote the green transformation and upgrading of domestic industries.

In addition, the new law also establishes the important position of new forms and models of foreign trade from a legal perspective. For example, Article 59 of the new law clearly states: "The state supports and promotes the innovative development of foreign trade formats and models such as cross-border e-commerce and comprehensive foreign trade services." At the same time, Article 60 further proposes to "support the use of electronic bills of lading, electronic invoices, etc., and promote international mutual recognition of digital certificates, electronic signatures, etc.

The international mutual recognition of digital authentication, electronic signatures, etc. should be said to be a practice of the past few years, including in the negotiations of the WTO Electronic Commerce Agreement, which is also an important content. ”Tu Xinquan said that mentioning this orientation in the law also clarifies the direction of future work efforts, including the direction of future efforts in international negotiations.

Li Fayin pointed out that in recent years, the booming development of digital trade such as cross-border e-commerce in China has made this new trade format increasingly important in China's foreign trade. At the same time, it will also face more restrictions and stricter compliance requirements from some countries. Article 59 of the new law provides top-level legal protection for the digitalization of foreign trade and the development and transformation of digital trade, as well as institutional guarantees for promoting digital trade and trade digitization and facilitation.

The state supports and promotes small and medium-sized enterprises to engage in foreign trade

In the legislative purpose of this new law, provisions are made for "safeguarding national sovereignty, security, and development interests". Tu Xinquan believes that for the Foreign Trade Law, promoting cross-border trade liberalization and facilitation is the direction and goal, but the prerequisite is to ensure security, which is also the result of changes in the situation.

Private enterprises, mainly small and medium-sized enterprises, have already become the largest foreign trade operators in China. The revised new law also has more targeted arrangements to enhance the development resilience of small and medium-sized foreign trade enterprises. For example, Article 68 of the new law clearly states: "The state supports and promotes small and medium-sized enterprises to engage in foreign trade, and provides convenience in supervision, financing, foreign exchange settlement, and other aspects

In recent years, some countries have taken trade remedy measures against China, reaching a new height in terms of the number of countries, cases, product scope, trade amount, and other aspects. There are also many cases of violating WTO rules and obligations and abusing trade remedy measures in terms of specific investigation methods and measures taken. ”Li Fayin pointed out that in response to trade remedy investigations, it is necessary to strengthen the capacity building of both the government and enterprises. Article 55 of the new law stipulates the establishment of a trade adjustment assistance system that complies with WTO rules and provides adjustment support for enterprises affected by trade remedy measures, providing strong support for enterprise level response. In addition, the new law specifies some national level trade measures tools, including trade measures that can be taken based on their impact on national security or trade barriers, enriching the toolbox for national level responses and providing more legal options.

Shi Xiaoli stated that the new law has also improved the early warning and emergency response mechanism. The Ministry of Commerce can conduct trade policy evaluations of relevant countries and regions as needed in order to adopt corresponding solutions; At the same time, the trade adjustment assistance system that has been successfully piloted in some regions will be elevated to the legal level and promoted nationwide. To cope with the impact of trade risks and changes in the trade environment, local governments can establish a trade adjustment assistance system as needed, carry out trade adjustment assistance work for enterprises that have suffered adverse effects, and stabilize industrial and supply chains.