China’s new export control regulations: How to define sensitive goods and ordinary goods?

China’s new export control regulations define sensitive goods and ordinary goods mainly based on national security, international obligations and industrial development needs, and divide them through multiple dimensions such as laws and regulations, list management and technical standards. The following is an analysis of the key points:

1. Legal basis

“Export Control Law” (effective in December 2020)
Clearly includes “goods, technologies and services that have a significant impact on national security, international peace and security” into the scope of control, covering dual-use items, military products, nuclear materials, etc.

Supporting regulations and lists

“Catalogue of Dual-Use Items and Technologies Import and Export License Management” (issued by the Ministry of Commerce and the General Administration of Customs)

“Catalogue of Technologies Prohibited and Restricted from Export in China” (dynamic adjustment, 23 restricted technologies added in the 2023 version)

“Military Products Export Management List” (led by the State Administration of Science, Technology and Industry for National Defense)

II. Definition criteria for sensitive goods

National security relevance

Involving military use (such as high-precision machine tools, drone systems, encryption equipment);

Can be used for the development of weapons of mass destruction (such as nuclear materials, biochemical technology);

Related to critical infrastructure (such as semiconductor equipment, quantum technology).

Technical sensitivity

Meeting specific technical parameters (such as chip process ≤14nm, supercomputing power ≥8PFlops);

Included in the international control system (such as items on the Wassenaar Arrangement control list).

End-user and use risks

Export to sanctioned countries/entities (such as areas restricted by UN Security Council resolutions);

There is a risk of “civil-military fusion”

Items in emerging fields

Artificial intelligence (AI training data, large model algorithms);

Aerospace (hypersonic technology, satellite remote sensing);

Biotechnology (gene editing equipment, pathogen samples).

III. Determination of ordinary goods

Not involving the control list: Civilian goods not included in the above list (such as daily consumer goods, ordinary mechanical equipment).

Low technical threshold: Technical parameters are lower than the control standards (such as ordinary electronic components, basic materials).

No end-use risk: The buyer signs the end-user commitment letter (EUCS) to clarify the civilian enterprise.

IV. Key points of corporate compliance

List comparison

Regularly check the Ministry of Commerce’s “Dual-Use Items Catalog” and technical catalog updates (such as the new photovoltaic silicon wafer technology restrictions in 2023).

Refer to the customs HS code and the cross-index of controlled items.

Technical evaluation

Professional identification of cargo parameters (such as whether the “computational lithography software” control threshold is reached).

A third-party agency issues a technical evaluation report (applicable to gray area items).

License Application

Sensitive goods need to apply for export licenses from the Ministry of Commerce or the State Administration of Science, Technology and Industry for National Defense (end-user certification, purpose description, etc. need to be submitted).

Ordinary goods only need routine customs declaration, but transaction records need to be kept for reference.

Risk Warning

Pay attention to international developments such as the US BIS Entity List and the EU Dual-Use Regulation to prevent the risk of “long-arm jurisdiction”.

V. Typical Case Reference

Sensitive goods: A company exporting high-precision fiber optic gyroscopes (which can be used for missile guidance) was required to apply for a military product license.

Ordinary goods: Exported commercial air conditioners (without special encryption or military adaptation functions) are cleared normally.

VI. Dynamic Adjustment Mechanism

China’s export control list may be revised every year. Companies need to establish compliance departments or use professional law firms to track policy changes, especially when it comes to emerging technology fields (such as the possible addition of controls on advanced battery materials in 2024).

For further operational guidance, it is recommended to consult the Trade Remedies Bureau of the Ministry of Commerce or entrust an AEO certified compliance consultant.