China Market Intelligence

On December 21 of last year, China’s Ministry of Commerce (MOFCOM) and Ministry of Science and Technology (MOST) published an updated version of its Catalog of Technologies Prohibited and Restricted from Export to include new export bans and restrictions on processing technologies for producing rare earth magnets.

Last August, China’s State Council released Document No. 11, also called the 24 Measures, which outlines measures to attract and utilize foreign investment in China. Several of the measures speak to long-held concerns of the US business community, including cross-border data transfer, government procurement, and intellectual property (IP) theft.

Senate Majority Leader Chuck Schumer (D-NY) has set a goal of passing a comprehensive China bill by year’s end. Select Committee on the CCP Chairman Mike Gallagher (R-WI), has said the same, and it remains to see whether either will be able to rally enough support in their respective Houses.

Thank you to all who partnered on and joined our Jubilee Gala in Washington last week, as well as those who were a part of our 50th anniversary galas in Beijing and Shanghai earlier this year. I was honored to be in the company of so many members, USCBC alum, friends, China scholars, and officials from both the United States and China.

From December 11 to 12, China held its Central Economic Work Conference (CEWC), an annual agenda-setting moment for China’s economic policy for the upcoming year. As in past years, the meeting was chaired by President Xi Jinping.

China has seen several high-level personnel changes at the central and provincial levels over the last few months. Notably, the National People’s Congress Standing Committee (NPCSC) voted to remove Li Shangfu from his position as China’s defense minister.

House and Senate lawmakers unveiled the compromise version of the FY2024 National Defense Authorization Act (NDAA) last week after weeks of negotiations. The NDAA, the annual legislation that authorizes funding the Department of Defense, has become a key yearly vehicle for pushing through China policy priorities, including those not related to defense.

During the final week of November, the US and Chinese governments separately unveiled new iterations of their respective strategies to attract investment and strengthen supply chains. The Biden administration held an inaugural meeting of the White House Council on Supply Chain Resilience, and at the same time, senior Chinese policymakers and domestic and foreign companies gathered in Beijing to attend a five-day supply chain expo and policy forum.

In the last year, the Cyberspace Administration of China (CAC) adjusted its rules for cross-border data transfers (CBDT) in what appears to be a slowly loosening government approach to managing data flows. However, given that many fundamental regulations remain in draft form and key terms remain undefined, the change in approach has not yet materialized into lighter compliance burdens for companies.

A four-hour meeting between President Joe Biden and President Xi Jinping on the sidelines of this year’s APEC summit in San Francisco served as a pivotal juncture in thawing relations between the United States and China. The meeting laid the groundwork for expanding communication across multiple levels of government, but it remains to be seen what this will look like in practice and how it will impact US-China commercial relations.