Chinese Law Advisory | Rare Earth Export Controls and the Amended Foreign Trade Law…Structural Changes in China Trade-Regulation Risk

The Chinese Ministry of Commerce has announced a policy to strengthen its existing export control regime, to expand the scope of regulation over rare earths and key minerals, and to introduce extraterritorial application for certain items.

Previously, an export-licensing system centered on specific rare earth elements was operated; through these measures, however, the covered items have been expanded, and the scope of regulation has broadened significantly to include strategic materials such as synthetic diamonds.

Going further, the reach of the regulation is expanding in such a way that, even where a product is manufactured abroad but contains any portion of Chinese-origin raw materials, the export of that product to a third country requires authorization from the Chinese government.

Under this structure, even when a Korean company exports to another country a product made using Chinese-origin raw materials, it may become subject to regulation, so a comprehensive review of the entire supply chain is unavoidable.

China is also strengthening its export controls on dual-use items targeting specific countries.

In particular, under the measures targeting Japan, it has introduced comprehensive regulation, including a ban on the export of all goods that may contribute to the enhancement of military capability, not merely goods for military use.

The core of these measures is that they bring within the scope of regulation even the re-export of products containing goods of Chinese origin.

That is, even where a Korean company imports raw materials from China and then processes and exports them to a specific country, it may become subject to sanctions.

This means that companies must simultaneously take into account not only their own domestic laws but also China's export-control framework, and it is a factor that affects the very design of global transaction structures.

China-related regulation is an area that requires consideration not only of statutory interpretation but also of administrative practice, policy direction, and local enforcement practices.

Centered on an attorney with experience as a legal cooperation officer at the Korean Embassy in China who handled international criminal and corporate legal matters, Daeryun Law Firm LLP provides practical Chinese law advisory based on experience accumulated across a wide range of fields, including investment in China, trademark and copyright disputes, arbitration, and civil and criminal litigation.

In addition, through a system of collaboration with local Chinese law firms, it can provide an integrated response to complex legal issues such as cross-border transactions, responses to export controls, and dispute resolution, and it also supports companies in analyzing supply chain risks arising from changes in Chinese regulation and in designing contract structures.

Principal Scope of Support in Chinese Law Advisory

1. Advisory on Responses to Export Controls and Trade Regulation

2. Diagnosis of Global Supply Chain Risks

3. Contract and Transaction Structure Design

4. Advisory on Investment and Business Operations in China

5. Responses to Litigation, Arbitration, and Criminal Matters in China

6. Integrated Cross-Border Legal Response

7. Advisory on Responses to Local Regulation and Policy

The China trade-regulation environment is changing rapidly, and how companies respond to it has a direct impact on their global competitiveness.

Daeryun, ranked the 9th-largest law firm in the Republic of Korea (based on 2025 value-added tax filings with the National Tax Service), will provide strategic and practical Chinese law advisory so that companies can conduct their business stably within this changing regulatory environment.