In today's AI-driven era, advanced semiconductors have become central to both commercial innovation and national security. U.S. export control laws have been rapidly expanding its influential scope and even extending to the jurisdictions of U.S. allied countries. These developments have drawn intense attention from industry and policymakers alike, who view U.S. controls as the benchmark for global technology governance. 

What is less well known, however, is that China has maintained its own legal regime governing cross-border technology trade dates back decades. It only rarely affected mainstream commercial transactions until recent geopolitical and supply-chain pressures brought them into the spotlight. Against this evolving backdrop, technology import and export controls have reemerged as a mainstream compliance priority. 

This article therefore offers an overview of China's technology import/export statutes and practical guidance on compliance, equipping international stakeholders with the tips they need to navigate both sets of rules.

China's technology trade control system has evolved through three distinct phases, shaped by geopolitical dynamics and technological advancements. The framework's development began with the enactment of the Foreign Trade Law (《对外贸易法》, FTL), enacted in 1994 and revised in 2004, 2016, and 2022 (currently effective as the 2022 Amendment), established constitutional authority for technology controls under Article 16.

In December 2001, the government operationalized the FTL by introducing three key regulatory documents: Regulations on Technology Import and Export Administration (《技术进出口管理条例》, the "Regulations") , effective January 2002 and later revised in 2020; the Measures for Prohibited/Restricted Export Technology (《禁止进口限制进口技术管理办法》), first issued in 1998 and last updated in 2019; the Catalogue of Prohibited/Restricted Import Technology (《中国禁止进口限制进口技术目录》), launched in 2001 with updates in 2007 and 2021; and the Catalogue of Prohibited/Restricted Export Technology (《中国禁止出口限制出口技术目录》), launched in 2001 with major updates in 2008 2020 and 2023, currently amendment effective since March 2024, streamlined entries from 164 to 134 while expanding coverage to include AI, quantum computing, and genetic engineering.

The system entered a transformative phase in December 2020 with the Export Control Law (《出口管制法》), which unified controls over dual-use, military, and nuclear technologies while introducing extraterritorial jurisdiction and reciprocal measures mirroring U.S.-style restrictions.

Briefly, technology import and export refer to the cross-border transfer of ownership or right to use of technology between domestic and foreign parties.[1]

Any assignment or licensing of technology, including patents/applications (even those have been published and/or granted), exclusive rights for IC layout designs, computer software copyright, new plant varieties rights, and technical secrets and so on[2], are deemed as technology import/export actions.

It is significant to understand that whether any contemplated transaction is subjected to China technology import and export control depends on the geographical location. In principle, any license, transfer or other actions to transmit any technology developed in PRC to any person or entity abroad shall comply with the legal regime.

China has two sets of technology import/export control systems. One is the export control (export only) for military and dual-Use technology, the other is the import and export of civilian technology. The former one primarily focuses on non-proliferation, maintaining military superiority, safeguarding national security, while the latter one mainly considers national technological competitiveness.

According to the Foreign Trade Law and the Regulations, the imported/exported technology is divided into three categories, namely free, restricted and prohibited. To specifically determine which category a particular technology falls into, reference must be made to the dynamically updated Catalogue of Prohibited or Restricted Import/Export Technology. 

As the literally meaning suggests, technology falling into a "prohibited" category shall not be imported or exported in any scenarios. "Restricted" technology may be traded only under a license issued by the competent foreign trade department under the State Council or related agencies, which refers to the local provincial bureau of commerce in real practice ("Competent Authority"). Technology not on any prohibited or restricted catalogue may generally be deemed as freely importable/exportable.

China establishes two distinct compliance tracks depending on the technology classification (restricted vs. free), with each category subject to the following different procedures:

1. Freely Importable/Exportable Technology

The technology under this category can be freely traded without governmental approval. That said, the Parties shall still register the contract with the authorities as required under the Regulations. Nevertheless, the contract will come into effect upon the execution by the Parties, regardless whether the registration is accomplished.[4]

In the case of importing/exporting technology subject to this category, the contracts thereof shall be registered with the Competent Authority under the State Council within 60 days of the contract's effective date and the following documents shall be submitted: (1) an application for registration of technology export contract; (2) a copy of the technology export contract; and (3) any regulatory document certifying the legal status of the contracting parties.[5] The above procedure will be accomplished on the e-platform of Minister of Commerce in current practice.

It is worth being noted that, the Parties will be required to present the Technology Import/Export Contract Registration Certificate, which is issued after the accomplishment of contract registration, to the bank in order to complete the relevant foreign exchange, banking, tax, and Customs formalities.[6]

2. Restricted Import/Export Technology

The technology under this category shall not be imported/exported without a license from the Competent Authority.[7] The licensing process consists of two phases: 

Phase I: obtaining the Letter of Intent (as defined below)

In order to facilitate the import/export of such technology, the Parties shall submit an application to the Competent Authority. The application package includes Application for Approval of Restricted Import/Export Technology in China, Technology Import/Export Agreement, Checklist of Application Materials, proof of the Parties' legal qualifications and relevant technical documentation. 

In addition, for export restricted technologies, applicants must submit, among others, the following supporting materials: Complete Instructions for Use of the Technology to be Exported, Intellectual Property Inventory and Certificates, and a Principal Technical Specifications Chart - all of which are required to demonstrate the nature, scope and legitimate ownership of the technology to be exported.

Conversely, for import restricted technologies, the applicant must also include the official Project Approval Document issued by the Competent Authority, thereby confirming that the importation has been duly authorized under China's industrial and security policies.

Upon receipt of the application, the Competent Authority, in conjunction with the bureau of science and technology of the same level government as the case may be, will undertake a comprehensive examination and render a preliminary decision within 30 working days in general. In case of preliminary approval, the Competent Authority will issue a "Letter of Intent for Technology Export License" (the "Letter of Intent"), which is typically valid for up to three years.[8] After obtaining the Letter of Intent, the Parties may begin substantive negotiation and conclude a definitive contract for the technology import/export.[9]

Phase II: obtaining the Technology Import/Export License (as defined below)

Once the Parties reach consensus on the draft of the definitive contract, the Parties may then apply for the "Technology Import/Export License of the People's Republic of China" (the "Technology Import/Export License").[10] The application package includes the Letter of Intent, a copy of the contract initialed by the Parties [Note: the contract shall be signed before submission, however the contract may need to be further revised in accordance with the opinion of the authority, i.e. the Parties may need to execute multiple versions of the definitive contracts until the grant of final license], a detailed technology description or goods list (for customs), and proof of the parties' legal qualifications.[11] Upon receipt of the application, the Competent Authority will then examine and render a final decision on approval or disapproval of the technology export within 15 working days (10 working days for technology import).[12] In case of final approval, the Technology Import/Export License will be issued to the exporting Party.

In addition, the technology import/export contract shall come into effect on the date when the Technology Import/Export License is issued.[13] After the license is issued, the transaction may proceed by presenting the technology import/export license to complete the relevant foreign exchange, banking, tax and customs formalities.[14]

Based on our experience in handling technology import/export matters, we have summarized the following practical tips for reference:

Tip 1: You May Wish to Settle the Core Terms in Phase I

The signed contract submitted by the applicant for obtaining the Technology Import/Export License must maintain consistency in its core terms with the cooperation intent agreement submitted during Phase I for obtaining the Letter of Intent. Otherwise, the local provincial bureau of commerce may treat the two documents as two separate transactions, requiring the applicant to revert to Phase I to obtain a new approval letter of intent reflecting the modified terms. 

Therefore, before submitting the copy of the definitive contract, it is recommended to settle the core commercial and legal clauses of the contract during the stage of applying for the Letter of Intent. The commercial clauses refer to elements such as consideration, license term, scope of license, and subject matter of the license, while the legal clauses include provisions such as applicable law and dispute resolution, etc.

Tip 2: Watch Out the Governing Law and Dispute Resolution Clauses

While there are no explicit legal requirements, the local provincial bureau of commerce tends to exhibit a preference regarding the choice of governing law. In one of our handled cases, the Parties initially designated the law of a third country/region as the applicable law, which is generally deemed as a neutral selection in international commercial practice. However, during the review process, the commerce authorities requested modification to PRC law.

Notably, regulatory attitudes may evolve at different times, as evidenced by the authorities' subsequent acceptance of third country/region law in part of cases we handled. Currently, apart from applying PRC law, choosing a neutral third-party jurisdiction (such as Hong Kong SAR or Singapore) as the governing law may stand a relatively high chance of approval. However, designating the foreign party's domestic law as the applicable law will likely face challenges during the document review stage. Therefore, we recommend that contracting parties address this issue during their initial negotiations to avoid the unnecessary complications of revising contract terms later.

Tip 3: Do Not Underestimate Self-assessment

Based on our practical experience, although the Competent Authority will conduct an internal assessment to determine the classification of the relevant technology upon receiving import/export applications, applicants may still be required to provide a self-assessment and explanation of the technology category at the outset to streamline the process and improve efficiency. 

For technology with disputed classifications, the Competent Authority may convene specialized technical review meetings. Applicants could be asked to participate in on-site deliberations, or to submit written explanations detailing the origin of the technology, its technical specifications, as well as the potential impacts of its export/import on domestic industries, national security, public interests or human health and safety. 

In such cases, we recommend that applicants conduct, either independently or with professional assistance, an assessment of the target technology's classification against the Catalogue of Technology Prohibited or Restricted from Import/Export, and prepare detailed explanatory materials/defense documentation accordingly.

Tip 4: Properly Handle the “Sign-First, Review-Later” Approach

Although the copy of the definitive contract submitted for Phase II application needs to be signed by both parties, the Competent Authority will still conduct a substantive review of its contents. If any non-compliant provisions are identified, the materials will be rejected, requiring the applicant to revise the contract terms and sign again, which means there could exist multiple versions of "executed" contract until the grant of final approval. 

This "sign-first, review-later" approach to some extent differentiate from standard commercial practices. To mitigate such risks, we recommend that the Parties: