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Why is China Introducing New
Technology Export Controls?
By Sofia Baruzzi, China Briefing, Dezan Shira & Associates
On August 28, 2020, the Ministry of Commerce of
the People’s Republic of China (MOFCOM) and
the Ministry of Science and Technology jointly issued
the Announcement No. 38 (2020) (“Announcement”)
amending the Catalogue of Technologies Prohibited or
Restricted from Export (“Catalogue”).
In total, 53 items have been deleted, added, or revised
– with new restrictions imposed on the export of 23
cutting edge technologies, which are either based
on China’s indigenous intellectual property or are
data-based personalized products that have become
sensitive due to geopolitical assessment or foreign
government scrutiny.
Regulation of China’s technology exports
To standardize the administration of technology
exports, promote scientific and technological
progress, facilitate foreign economic and technological
cooperation, and maintain the economic security of
the state – China has put in place a policy of catalogue
management on technology exports since 1998.
By technology exports, China’s government refers to to become a high-tech export giant, with computers,
the transfer of technology from the People’s Republic power devices, broadcasting technology, telephones,
of China to overseas through trade, investment, or and transport equipment dominating Chinese exports.
economic and technical cooperation. The specific (US$1=RMB 6.82).
format of such transfers could include patent
assignment, transfer of patent application rights, patent In this respect, the Regulations on Technology Import
licensing, transfer of technology secrets, technical and Export Administration of the People’s Republic
services, and other forms of technology transfer. of China (“Regulation” revised in 2019) provide that
the competent foreign trade department under the
According to MOFCOM statistics, in 2013, the value State Council shall, in conjunction with other relevant
of China’s technology export contracts was US$20 departments, formulate, regulate, and publish
billion, less than half the value of its technology catalogues of technologies the import and export of
import contracts. In 2019, the contract value of which is prohibited or restricted.
technology exports rose to US$32.1 billion, which saw
China’s exports closing the gap with the contract value Accordingly, all technology exports, whether through
of its technology imports. trade or investment or other way, should strictly
abide by the Regulation. Hence, technologies listed
More specifically, in 2019, China exported nearly RMB under the Catalogue as prohibited (those that include
2.96 trillion (US$434 billion) worth of merchandise materials containing state secrets, cultural relics
to the European Union – immediately followed by and antiques, and endangered species) shall not be
the United States – counting technologies among its exported.
top export goods, besides clothes and accessories.
In fact, the export of data processing machines and On the other hand, technologies listed in the restricted
related components alone were worth RMB 1.14 category will be subject to licensing administration
trillion (US$167 billion). This is no longer surprising
as China’s sophisticated supply chain has enabled it
3 AMCHAM SOUTH CHINA
Why is China Introducing New
Technology Export Controls?
By Sofia Baruzzi, China Briefing, Dezan Shira & Associates
On August 28, 2020, the Ministry of Commerce of
the People’s Republic of China (MOFCOM) and
the Ministry of Science and Technology jointly issued
the Announcement No. 38 (2020) (“Announcement”)
amending the Catalogue of Technologies Prohibited or
Restricted from Export (“Catalogue”).
In total, 53 items have been deleted, added, or revised
– with new restrictions imposed on the export of 23
cutting edge technologies, which are either based
on China’s indigenous intellectual property or are
data-based personalized products that have become
sensitive due to geopolitical assessment or foreign
government scrutiny.
Regulation of China’s technology exports
To standardize the administration of technology
exports, promote scientific and technological
progress, facilitate foreign economic and technological
cooperation, and maintain the economic security of
the state – China has put in place a policy of catalogue
management on technology exports since 1998.
By technology exports, China’s government refers to to become a high-tech export giant, with computers,
the transfer of technology from the People’s Republic power devices, broadcasting technology, telephones,
of China to overseas through trade, investment, or and transport equipment dominating Chinese exports.
economic and technical cooperation. The specific (US$1=RMB 6.82).
format of such transfers could include patent
assignment, transfer of patent application rights, patent In this respect, the Regulations on Technology Import
licensing, transfer of technology secrets, technical and Export Administration of the People’s Republic
services, and other forms of technology transfer. of China (“Regulation” revised in 2019) provide that
the competent foreign trade department under the
According to MOFCOM statistics, in 2013, the value State Council shall, in conjunction with other relevant
of China’s technology export contracts was US$20 departments, formulate, regulate, and publish
billion, less than half the value of its technology catalogues of technologies the import and export of
import contracts. In 2019, the contract value of which is prohibited or restricted.
technology exports rose to US$32.1 billion, which saw
China’s exports closing the gap with the contract value Accordingly, all technology exports, whether through
of its technology imports. trade or investment or other way, should strictly
abide by the Regulation. Hence, technologies listed
More specifically, in 2019, China exported nearly RMB under the Catalogue as prohibited (those that include
2.96 trillion (US$434 billion) worth of merchandise materials containing state secrets, cultural relics
to the European Union – immediately followed by and antiques, and endangered species) shall not be
the United States – counting technologies among its exported.
top export goods, besides clothes and accessories.
In fact, the export of data processing machines and On the other hand, technologies listed in the restricted
related components alone were worth RMB 1.14 category will be subject to licensing administration
trillion (US$167 billion). This is no longer surprising
as China’s sophisticated supply chain has enabled it
3 AMCHAM SOUTH CHINA
