China has just passed a new law to limit exports of sensitive products and technologies which will be applied from 1er December. The text is motivated by the defense of national security. It plans to take reciprocal measures in the event that a country harms its interests. It is therefore a question of responding in a more offensive way to the diplomatic-trade war waged by the United States.

Criminal sanctions

Goods, services and technologies are affected, including algorithms or drones. 5G, an area in which China is a leader, could be particularly affected. The list is expected to grow and controls will intensify.

According to the Japanese daily Nikkei, some observers are worried that rare earths, necessary for the manufacture of electronic components and of which China controls 60% of the market share, are added to this list. A threat that Chinese representatives had already mentioned at the start of the Huawei affair. In any case, this new law, which will therefore come into force after the US presidential election, provides for criminal sanctions, including for companies and individuals who are outside China.

The question still arises as to whether Beijing will eventually allow selling TikTok to Oracle and Walmart. With this law, negotiations will become even more complicated. The app’s voice recognition and recommendation technology was added to the list of regulated exports dating back to August.

Source: Bloomberg and Nikkei

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