Foreign Trade Law of China
The development of Foreign Trade Law of People’s Republic of China is a great mirror of China’s economic system reform, opening-up policy and earnest commitment toWTO. The first Foreign Trade Law was enacted in 1994 as the result of the international trade boom since China announced “opening” to the outside world in 1978. To accommodate WTO’s requirements and discharge its obligations, China overhauled the Foreign Trade Law and promulgated a new revision in 2004, two years after its entry to WTO. This new Foreign Trade Law includes 11 chapters and 70 clauses, removing and revising all stipulations not in line with WTO rules and adding facilitating regulations for foreign trade development.
Scope of China’s Foreign Trade Law
Unlike the international trade law in western countries like USA where the foreign trade law governs both import and export trade and foreign investment, China’s Foreign Trade Law only applies to all the business activities of import and export of goods and technologies as well as international service trade. China has separate laws for foreign investment (refer to Related Regulations and Documents).
Who and How to be “Foreign Trade Operator”
“Foreign Trade Operator” is defined as any legal person who has completed filing procedures which are much looser than administrative approval in the past and who complies with the Foreign Trade Law and other laws and regulations. The filing procedure is actually only clerical procedure as is required by WTO obligations. But foreign individuals who want to engage in foreign trade in China may have to establish a foreign-invested enterprise. For foreign-related service providers, international project contractors and labor cooperation participants must have corresponding qualifications or ability. Certain goods can only be traded by the state-authorized enterprises.
What Goods and Technologies can or cannot be Imported or Exported
Goods and technologies are categorized into three categories: those subject to automatic import or export licensing, those subject to import or export license administration and those prohibited from import or export.
Some goods that are permitted by the State for free import and export can get automatic import and export license upon approval of the application of the consignee or the consigner. In the case of technology importing or exporting, the contracts thereof shall be registered with the designated authority. Some goods and technologies are restricted in the way of quota and licensing control or prohibited in import or export for security, public interest, ethical, environmental or human health and other reasons.
The lists of these three categories of goods are updated annually by China’s Ministry of Commerce and General Administration of Customs and can be requested there.
International Service Trade
The contracting party or participating party of international treaties or agreements by which China is bound will be granted market access and national treatment. The international service trade is governed by this Foreign Trade Law and other related laws and administrative regulations. The list of permitted or prohibited services can be requested from China’s Ministry of Commerce and General Administration of Customs.
Intellectual Property Rights Protection
Manufacturers or sellers who import or export goods that infringe IPR may be subject to suspension from doing business for a specified period. However, China’s Foreign Trade Law is criticized by China Law and Practice as too vague in regulating technology importing. As of now, China’s Ministry of Commerce has not yet come up specific regulations on IPR disputes.
Related Regulations and Documents:
For international trade, China has instituted a complete network of related laws and regulations governing every aspect concerned, including:
Arbitration Law of the People’s Republic of China
Regulations of the People’s Republic of China on Import and Export Duties
Reference Book:
International Trade Regulation in China: Law and Policy (China and International Economic Law)