China passes new export control law to protect its vital technology

The new law provides a framework for Beijing to better fight back.
The new law provides a framework for Beijing to better fight back.PHOTO: REUTERS

BEIJING (BLOOMBERG) - China passed a new law on Saturday (Oct 17) to restrict sensitive exports to protect national security, helping Beijing gain reciprocity against the United States as tech tensions mount.

The country’s top legislative body, the National People’s Congress Standing Committee, adopted the measure that applies to all companies in China, including foreign-invested ones, according to state broadcaster CCTV.  The law will be effective Dec 1, it said, without providing further details.

Souring ties between China and the US had led Washington to take action against several Chinese companies including Huawei Technologies, ByteDance’s TikTok app, Tencent Holdings’ WeChat, and Semiconductor Manufacturing International Corp. The new law provides a framework for Beijing to better fight back. 

While its existing control list is much narrower than the one used by the US, the country’s commerce ministry made an amendment in August that included technology such as algorithms and drones. The list could be further expanded to include even more products and technologies. 

Whether Beijing will allow the export of valuable Chinese technology is one of the biggest uncertainties hovering over the partial sale of TikTok to Oracle  and American investors. China in August asserted the right to block the deal by adding speech recognition and recommendation technology – the core of TikTok’s global popularity – to a list of regulated exports.