State Council releases export control regs for dual-use items

China is laying the groundwork for tighter export controls. 

On Saturday, the State Council released the Dual-use Item Export Control Regulations. 

• The Ministry of Commerce (MofCom) will be responsible for enforcing the new regulations, which will take effect December 1. 

Some context: China’s export control system is still relatively new, with the first export control law passed in 2020.

• In contrast, many Western countries have had export control systems in place for decades.

The new regulations consolidate previous export control rules, aligning China's system more closely with Western models.

• Dual-use items, including those with potential applications in producing weapons of mass destruction or threatening China's national security, are subject to strict controls.
• Exporters must obtain regulatory approval – or halt transactions altogether – before exporting controlled items to entities on the "Control List," which functions similarly to the US Entity List.

The regulation also takes inspiration from Washington’s long-arm jurisdiction:

• It empowers MofCom to take action against foreign entities that supply products containing Chinese-origin dual-use items to third parties.

What to watch: In a published Q&A, MofCom said a consolidated list of dual-use items will be released soon. 

Get smart: Graphite, germanium, and gallium – all designated as dual-use last year – will not be the only critical minerals to make the list.

The bottom line: Given the growing competition for strategic resources, China's use of its export control system will become increasingly prominent in the years ahead.