In December 2025, the National People’s Congress Standing Committee approved amendments to the People’s Republic of China’s (PRC) Foreign Trade Law (FTL). The stated purpose of the amendments, which came into effect on March 1, 2026, is to strengthen protections for Chinese intellectual property (IP) rights and improve the “legal toolkit” that authorities can use in response to geopolitical tensions.
Left unspoken in the official statement — but evident in the text — is the securitization of foreign trade and IP regulation. These amendments grant officials broad discretion to define and respond to perceived threats to national security or sovereignty, embedding security considerations into commercial governance. They also align closely with core Chinese Communist Party (CCP) priorities, reinforcing state support for sectors Beijing seeks to expand globally, including clean energy, e-commerce, and professional services.
As Canada advances economic engagement under the strategic partnership announced during Prime Minister Mark Carney’s January 2026 visit to China, understanding these amendments is critical. Their breadth leaves significant room for interpretation, with real implications for how trade may be governed in practice.
The ‘primacy’ of securitization
The amendments must be understood as part of a broader effort to modernize the PRC’s domestic market. They align with the CCP’s goal of restoring China to a global leader in economics, politics, and society. More importantly, they reflect securitization as the organizing principle of economic regulation.
The CCP’s doctrine of “holistic national security” (总体国家安全) defines security expansively and integrates it across trade, technology, finance, and social policy. The amendments reaffirm this framework, further aligning statutory trade and IP regulation with the CCP’s overarching national security doctrine.
Over the last decade, the PRC has moved to formalize and expand the country’s export control regime. Some Western analysts caution that these efforts, which seek to mirror the U.S.’s highly sophisticated export regime, remain comparatively blunt, slow, and generate market uncertainty. Others argue that as the PRC continues to hone its economic statecraft, even imperfect instruments may be sufficient to eliminate global opposition to PRC policy priorities.
Whatever the assessment of their technical precision, the amendments to the FTL leave little ambiguity as to the hierarchy of purpose: by expressly stating in Article 1 that safeguarding national sovereignty and security sits at the apex of foreign trade regulation, they reaffirm the primacy of securitization within the PRC’s trade governance framework.
Unfettered discretion
The breadth of this securitization framing is significant in the PRC context, where “national security” is a political-ideological construct, broadly defined to include non-traditional security policy considerations. In practice, perceived threats have extended well beyond conventional security concerns to include public figures commenting on Taiwan or Hong Kong, corporate language referencing Taiwan as a country, and cultural or political actions such as the awarding of the Nobel Peace Prize.
With this expansive definition of “national security,” authorities under the previous version of the FTL already possessed broad discretion to restrict imports and exports.
Amendments to Articles 18 and 29 significantly widen these powers by introducing catch-all language permitting controls in “other circumstances” deemed necessary and extending available measures beyond restriction to include prohibition or the adoption of “other necessary measures.” The amendments further broaden authorities’ power to restrict goods, technology or services, from times of war to “other emergencies in international order” (Articles 19 and 30).
The combined effect of these additions provides unfettered discretion to PRC authorities in determining when a good, technology, or service may be restricted and how such measures are imposed. In practical terms, this affords Beijing considerable negotiating leverage, particularly given its dominance in strategic sectors such as critical minerals and the continued importance of access to the Chinese market.
By way of contrast, in Canada, export restrictions are limited to defined statutory grounds, including substantial risks to peace and security, breaches of international law or treaty commitments, and involvement in gender-based violence. Grounding export controls in established legal frameworks provides greater certainty, transparency, and accountability for companies seeking to understand and manage export control risks. This is distinct from the expanded, open-ended discretion embedded in the revised PRC Foreign Trade Law.
The risks stemming from unfettered discretion are not theoretical. The PRC’s use of economic coercion to advance political objectives is well-documented.
The Australian Strategic Policy Institute identified 150 cases of economic coercion from 2010–22, with nearly half occurring between 2020–22. Reported tactics have included restrictions on trade, investment, and tourism; informal or formalized boycotts; state-issued threats; cyber operations; and, in some instances, the arbitrary detention of foreign nationals within the PRC.
Global influence
Under the leadership of Chinese President and CCP Chairman Xi Jinping, Beijing has adopted a more confident approach to reshaping international rules and institutions to reflect its own interests and governance model.
The growing use of extraterritorial provisions across criminal, commercial and technology laws is one clear example of this shift. Such provisions are designed not only to regulate conduct inside China, but also to influence behaviour abroad. The 2020 National Security Law for Hong Kong is the most notable example, with its extraterritorial reach contributing to a chilling effect on critics outside the PRC.
Revisions to Articles 40 and 76 of the FTL reflect a similar approach: foreign individuals or organizations deemed to harm the PRC’s development interests or the rights and interests of PRC citizens or companies may face liability — including fines exceeding C$99,000 (500,000 Chinese yuan).
The amendments also encourage more active PRC involvement in shaping international trade rules and dispute resolution systems. Article 33 supports participation in developing and revising international rules.
On its face, this aligns with Beijing’s stated support for the rules-based order, particularly amid perceptions of U.S. volatility. However, a small but significant addition to Article 51 reserves authority for domestic bodies to disregard decisions of international mechanisms when deemed “necessary” or when these mechanisms are not functioning “properly,” without defining those terms.
The result is not withdrawal from the system, but participation on terms that preserve domestic discretion.
Conclusion
Amid an increasingly volatile global trade environment, in which the PRC has been a target of U.S. sanctions and export controls, it is unsurprising that Beijing would seek to expand the tools available to respond swiftly to perceived trade pressure. However, the FTL amendments do more than provide defensive flexibility. They formalize a governance model in which national security considerations sit above market access and commercial predictability. The revised FTL embeds expansive discretion, extraterritorial reach, and conditional participation in international mechanisms at the core of China’s trade framework.
As countries seek to diversify economic relationships away from the U.S. and toward the PRC, bilateral agreements must be assessed within this broader political and regulatory context.
The FTL amendments, alongside related measures adopted by China in recent years, tell a consistent story: one of a highly securitized trade regime that preserves significant discretion for Chinese authorities. While Beijing continues to affirm support for the rules-based international order and welcomes expanded trade engagement, it is simultaneously codifying its authority to act in whatever manner it deems necessary to advance its political priorities.
• Edited by Vina Nadjibulla, Vice-President Research & Strategy, and Ted Fraser, Senior Editor, APF Canada
