China strengthens export control regime with technology exports and dual-use items

China has introduced measures to strengthen its export control regime, including proposed changes to its technology export control framework and the expansion of controls on dual-use items.

The following article summarises the key developments. 

Proposed additions to the Technology Export Catalogue

On 16 October 2026, the Ministry of Commerce (MOFCOM) and the Ministry of Science and Technology jointly issued Notice No. 48 of 2026, which proposed additions to China’s technology export catalogue and introduced an interim registration requirement with immediate effect.

The proposed amendments to the Catalogue of Technologies Prohibited and Restricted from Export cover 40 technologies in total, consisting of 23 AI technologies, five biomedicine and 12 photovoltaic.

• AI: The 23 technologies include cybersecurity, large-scale AI models, AI avatars, AI chip design, AI computing clusters and other information technologies. Regarding large-scale AI model technology, Notice No. 48 require that large-scale AI models trained using key data or important data in China fall within the scope of the Catalogue. Notice No. 48 also introduces computational capacity thresholds for determining whether certain large-scale AI model technologies are covered. For example, models involving a computational load of 10²⁶ floating-point operations or more may fall within the scope of the Catalogue. In addition, Notice No. 48 introduces facilitative measures, such as automatic licensing, for exports of certain restricted AI technologies, including the open-sourcing of AI technologies and technology exports connected to Chinese enterprises that have established and operated their own computing centres overseas, conducted overseas chip fabrication, utilised overseas resources for joint research and development or participated in the formulation of international standards.
   
• Life sciences: The five technologies relate to cell and gene therapy, small interfering RNA technology and pathogenic microorganisms. Notice No. 48 also introduces facilitative measures, such as automatic licensing for exports of restricted technologies in certain circumstances (e.g. public health emergencies, humanitarian relief, joint research and development utilising overseas resources), and the licensing of technologies to foreign entities.
   
• Photovoltaics: The proposed additions cover technologies relating to polysilicon, wafer and cell manufacturing, targeting both advanced processes and large-scale manufacturing capabilities. These include engineering design, process packages and equipment manufacturing technologies that meet the specified control criteria. The scope of the proposed controls also extends to key and core equipment supporting the relevant technologies.

Notice No. 48 also introduces an interim registration regime specifically applicable to the 40 technologies proposed to be added to the Catalogue. The interim registration regime took effect on 16 October 2026 and will remain in force until the revised Catalogue is formally promulgated and comes into effect. 

Notice No. 48 expressly provides that a transfer of ownership or actual control of a domestic enterprise holding the relevant technologies to an overseas entity will also trigger the interim registration requirement. This means that China – as before in the Provisions of the State Council on Outbound Investment that went into effect on 1 July 2026 – extends the technology export from mere trading and licence relationships to genuine M&A transactions. These M&A transactions will not only entail genuine overseas direct investment (ODI) where a Chinese enterprise newly invests in a foreign company or acquires a foreign company while transferring core technology abroad. Instead, foreign direct investment (FDI) transactions involving the acquisition of a Chinese technology company may also require a technology export compliance assessment where the transaction results in the ownership or actual control of the relevant domestic technology being transferred to an overseas entity.

Legal implications: Foreign enterprises with operations in China should consider whether transferring technologies developed in China and covered by Notice No. 48 to their overseas headquarters may trigger the interim registration requirement and, once the revised Catalogue takes effect, potential export licensing requirements. Similarly, Chinese companies in the AI, life sciences and photovoltaic sectors expanding overseas should be aware of potential technology export control requirements (e.g. the transfer or licensing of technology), an ODI project involving these sectors or an FDI project resulting in a change of control in a domestic technology enterprise. 

Expansion and adjustment of dual-use export controls on drones, tunnel boring machines and dredgers

On 19 October 2026, MOFCOM published new and revised export control measures for dredgers, tunnel boring machines and drones, which include the following:

• the introduction of export controls on certain tunnel boring machines now subject to export control requirements;
   
• adjustments to the technical specifications of dredgers subject to export controls; and
   
• adjustments to the technical specifications of drones subject to export controls.

Legal implications: Overseas entities and foreign investors should assess whether their existing business activities involve drones, dredging equipment or tunnel boring machines, and whether the export of any relevant items from China is subject to licensing requirements. Where an export licence is required, the relevant exports may face heightened regulatory scrutiny and longer approval timelines under the PRC export control regime.  

Introduction of customs challenge and determination process

On 19 October 2026, MOFCOM and the General Administration of Customs jointly issued Notice 52 on Matters Concerning the Further Optimisation of the Process for Challenging and Identifying Export Controls on Dual-Use Items.

Under Notice No. 52, customs may raise a challenge for goods presented for export without an export licence that may be subject to export controls and may require an export licence. Where a challenge is raised, the exporter must provide customs with the necessary supporting documents, including the technical specifications of the goods, within seven working days. The goods will not be released by customs while the challenge is in process.

Legal implications: Exporters should be mindful of the new challenge and determination process and be prepared to respond promptly to customs' requests for supporting information. Exporters should maintain appropriate technical documentation for potentially controlled items and factor possible customs-clearance delays into their export planning. 

Looking ahead

These developments reflect how China’s export control regime is becoming stronger and more refined with implications extending beyond traditional exports of physical goods to areas such as technology transfers, overseas R&D, licensing arrangements, ODI, and FDI.

Companies operating in China or engaging in China-related cross-border transactions should assess whether their products, technologies, supply chains and transaction structures are affected by the evolving controls. If they are, companies must update their export control compliance procedures.

For more information on how this expanded control regime could affect your China-based business, contact your CMS client partner or the CMS experts who contributed to this article.