(Yicai) April 8 -- China has issued its first dedicated administrative regulation aimed at preventing security risks in industrial and supply chains.

The new rules will enhance the resilience and security of industrial and supply chains and safeguard economic and social stability as well as national security, Xinhua News Agency reported yesterday, citing a State Council decree signed by Chinese Premier Li Qiang on March 31, promulgating the regulations effective immediately.

The regulations establish risk early-warning and emergency response systems, and set out procedures for security probes, countermeasures, and extraterritorial jurisdiction. For sectors facing technological bottlenecks, including integrated circuits and industrial machine tools, they require authorities to develop lists of key areas, build physical and capacity reserves, and increase research and development investment to strengthen supply chain resilience.

As a dedicated foreign-related security legislation, the rules' highlight is their well-designed countermeasures against actions that threaten China's industrial and supply chain security, said Liao Shiping, a professor at the Beijing Normal University's Law School. They strengthen the coherence of foreign-related security legislation and expand the country's toolkit for foreign-related legal disputes, Liao added.

The regulations stipulate different countermeasures for different entities. For violations of fundamental international law principles by foreign countries, regions, or international organizations, authorities may ban or restrict imports and exports of goods and tech and trade in services, as well as impose special fees. For foreign organizations and individuals that breach normal market transaction principles, their investment in China may be restricted, or Chinese entities may be banned from engaging in related transactions, cooperation, or other activities with them.

While China already possesses the world's most complete range of industrial categories, some critical core technologies remain constrained by external dependencies, with bottlenecks persisting in key components, basic materials, and high-end equipment, noted Wang Minghui, a researcher at the industrial economy research department of the State Council's Development Research Center.

Introducing supply chain security regulations at the national level is an important step toward addressing these structural weaknesses, closing gaps in legal protection, and managing major risks, Wang pointed out. It is a key step in China's efforts to respond to pressure from Western countries, proactively shape its international operating environment, and navigate global strategic competition, Wang added.

Editor: Martin Kadiev