China is rethinking its industrial technology export controls

When most people think of China’s export controls, they think of dual-use controls – the dramatic, headline-grabbing restrictions on critical mineral products like gallium, graphite, and most famously, rare earths.

• Beijing has famously deployed these levers as retaliatory weapons in its tech war with Washington.

But there’s a parallel, less headline-grabbing export control system that rarely makes the news. 

• And new research from some of China’s top state scientists suggests that Beijing’s senior technical advisors are fundamentally rethinking how China manages its industrial technology exports.

The details: The paper – titled “Framework and Empirical Study on the Selection Framework of Export-Restricted Technology in the China-US Technology Landscape” – was published in March by researchers from four of China’s leading government-affiliated science and engineering institutes.

• The South China Morning Post brought public attention to it in a June 1 report.

To be clear, this is a technical research paper; it is not official government policy. 

• But in China’s Political system, research like this doesn’t get published unless leadership wants options on the table. 
• We therefore expect it to directly inform the highest levels of debate on export control strategy.

To understand why this matters, it helps to understand the distinct purposes that China’s parallel export control systems serve.

The first system is the one that makes headlines: The dual-use export control system, established under the 2020 Export Control Law. 

• This is the mechanism Beijing has used to impose retaliatory restrictions on critical minerals and materials amid US-China trade tensions – a tool of economic statecraft deployed in pursuit of geopolitical objectives.

The second is far less well known: The industrial technology restriction system, which has been quietly operating since 2001. 

• Governed by a document called the Catalogue of Technologies Prohibited or Restricted from Export, this system manages civilian technologies – process know-how, licensing, and technical transfers – wherever they are relevant to China’s industrial competitiveness.
• Think advanced cathode production, high-value crop breeding techniques, and cutting-edge metallurgy. 
• Critically, most technologically advanced economies, including the US, have similar mechanisms.
• This is routine industrial policy, not economic warfare.

The new research focuses entirely on the second system – and its diagnosis is blunt. 

• China’s management of the Catalogue is, in the authors’ own words, “weak.”
• The system is opaque, slow, and more reactive than strategic.
• That was perhaps acceptable when China was still catching up technologically. But it is no longer acceptable now that China has become a global leader in frontier technologies – and faces what the authors describe as “systemic suppression” and “comprehensive containment” from the West.

The solution the researchers propose is a structured, three-test framework for deciding which technologies should be restricted – explicitly modelled on how the US manages its own technology export controls.

Under the proposed framework, a technology earns a place on the restricted list only if it clears all three tests. 

• Necessity: Is the technology strategically important to China, and does China genuinely lead the world in it? Both must be true. 
• Feasibility: Is the technology mature enough to actually control, and can buyers not easily source it elsewhere? Again, both must hold.
• Impact: Would restricting it cost China more than its rivals in lost innovation, jobs, or trade? 

It is a rigorous framework that prioritizes leverage over reflexive protectionism. A technology only gets restricted if China actually leads in it, if the restriction is enforceable, and if the costs to China are manageable. 

• That last test is a built-in check against the kind of overreach that would harm China’s own innovators and exporters.

In a pilot implementation, the researchers identified 63 technologies where China either leads or is contending for global leadership.

• Technologies were categorized into three tiers: “urgent” candidates for near-term restriction, “forward-looking” technologies worth monitoring, and “reserve” technologies not yet ready for controls. 

So could the results of this pilot indicate how Beijing will govern future industrial technology export controls, as it looks to lock in future industrial advantages?

• Well, maybe – but there are important caveats.

First, the pilot was incomplete. 

• Recall that the three-test framework requires each technology to clear three hurdles: necessity (strategic importance to China plus Chinese global leadership), feasibility (technological maturity plus limited substitutability elsewhere), and impact (net cost to China of imposing controls). 
• In the pilot, the researchers could not assess substitutability or impact due to time and data limitations. 
• That means the 63 technologies identified are not a rank-ordered menu of proposed new controls, even by the authors’ own standards. 

Second, it’s critical to note that the logic under which the researchers propose this framework – preserving China’s industrial competitive advantages – is fundamentally different from the logic that drives China’s retaliatory dual-use controls on critical minerals. 

• Those latter controls are geopolitical weapons, and their use is assessed on the basis of a given material’s strategic importance to other countries, often as a form of retaliation. 
• That means anyone trying to predict what comes next in China’s retaliatory toolkit should not be reading this research as a guide.

But what the research does tell us is something genuinely important: China’s approach to protecting its industrial technology base is being rethought from the ground up.

• The framework being proposed openly reverse engineers the US’s own approach, and may signal that Beijing intends to be far more systematic and forward-looking about where it draws the line for industrial tech export controls.

That means, while this research is not a list of controls to come, it is a serious public signal that the governance logic underpinning China’s industrial technology export controls is changing – and that the 63 technologies identified by China’s own experts as areas of strength are exactly where foreign companies and governments should be paying attention.

Cory Combs, Head of Supply Chains and Critical Minerals Research, Trivium China