China approves tougher Foreign Trade Law with new countermeasures, effective March 1, 2026
China’s Standing Committee of the National People’s Congress approved a revised Foreign Trade Law on December 27; the law takes effect March 1, 2026. The update expands legal powers to protect national sovereignty, security and development, and adds 11 chapters and 83 articles covering trade reform, digital trade, green trade, intellectual property protection and formal countermeasures for trade disputes. The law elevates measures such as negative-list management for cross-border services, support for new foreign-trade models including digital trade, and a legal push to align with — and help shape — high-standard international economic rules. Officials are now empowered to impose stronger legal responsibilities and countermeasures in trade conflicts. The revision comes amid a weakening industrial backdrop: China’s industrial profits fell 13.1% year-on-year in November 2025 (after a 5.5% drop in October), with overall 11-month profits up only 0.1%. Policymakers cite global rule shifts and the need to sustain foreign trade order and high-quality opening-up. Implications for markets include heightened regulatory tools for trade retaliation and a clearer legal framework for digital and green trade, which could influence supply chains, export-dependent sectors and geopolitical risk pricing.
Neutral
The revised Foreign Trade Law increases Beijing’s legal toolkit for trade disputes and formalises support for digital and green trade. For crypto markets this is a neutral development overall. Direct regulatory changes targeting cryptocurrencies were not included, so immediate price moves for major tokens are unlikely. However, the law raises geopolitical and trade-retaliation risk because it formally expands countermeasures — a factor that can increase market volatility in risk-on assets during trade escalations. Short-term: traders may see intermittent risk-off moves in crypto and equities if the law contributes to heightened China–foreign trade tensions or prompts targeted measures against specific sectors or countries. Long-term: clearer legal support for digital trade could be positive for blockchain-related commerce and tokenised services if China proceeds to implement supportive frameworks; conversely, strengthened national-security language could justify restrictive measures in sensitive technology and data sectors, raising regulatory uncertainty. Historical parallels: past Chinese trade or tech-security measures (export controls, data security rules) tended to cause short-term market volatility and sector rotation but rarely produced lasting bear markets across crypto unless combined with direct crypto bans. Therefore, expect episodic volatility and selective sector impact rather than a broad directional shock.