The PRC government has made some impressive strides toward bringing law in line with global practices. An example is the amended Foreign Trade Law of the People’s Republic of China (“Foreign Trade Law”), which went into effect July 1, 2004. Given that the law was not revised for the past ten years, the new amendments are fairly sweeping, with broader scope with respect to companies’ ability to conduct foreign trade, as well as entirely new sections on intellectual property rights, foreign trade investigative procedures and foreign trade remedies. This article provides a brief introduction and analysis:

The Legislative Background
The original Foreign Trade Law of the People’s Republic of China (“1994 Foreign Trade Law”) was enacted and became effective in 1994, and set forth the legal system for the State to administer foreign trade activities. The ten year period from then to now was marked by great change in Chinese foreign economic activities (particularly foreign trade). Rapid developments made this ten-year-old foreign trade no longer suitable for the demands of today’s PRC foreign trade activities.
China’s accession to the WTO also had an impact. The Chinese government needed to fulfill its accession commitments at the level of Chinese basic law on foreign trade. Moreover, China had been facing more and more dumping charges. China needed to have its business rules aligned with international rules, and also needed to strengthen the instructions for Chinese foreign trade operators by revising the original foreign trade law, so that the foreign trade law could play its role in protecting the market of China. Thus, the 1994 Foreign Trade law was revised to meet these needs.

Primary Changes
1. Who Can Engage in International Trade
Under the 1994 Foreign Trade Law, foreign trade operators were limited to legal persons and other organizations specifically designated or licensed to engage in foreign trade business activities. This meant that natural persons could not engage in foreign trade. Now, individuals can also engage in foreign trade activities.
2. From “Approval” to “Filing for Record”
Previously, foreign trade operators engaged in the import and export of goods or technology were required to obtain State approval prior to carrying out their transactions. The State closely supervised what went in and out of the country. Now, under the new Foreign Trade Law, foreign trade operators engaged in the import and export of goods or technology simply need to file a record of their transaction. Prior approval is no longer required.
3. Protection of Intellectual Property Rights
The 1994 Foreign Trade Law contained no provision concerning the protection of intellectual property rights. A new section, entitled “Protection of Intellectual Property Rights Related to Foreign Trade” has now been added which allow the State to enforce intellectual property rights under the law.
4. Monopolies and Unfair Competition
New articles (33 and 34) were added to the Foreign Trade Law that specifically prohibits monopolistic activities as defined in existing laws and administrative regulations against monopolies. These articles also prohibit acts of unfair competition such as selling commodities at an unfair low price, colluding in the submission of tenders, publishing false advertisements and engaging in commercial bribery.
5. Foreign Trade Investigation
Another new section, entitled “Foreign Trade Investigation” was added, as well. In order to safeguard foreign trade, the State Council department in charge of foreign trade may, independently or in conjunction with other State Council departments, conduct investigations under the provisions of laws and administrative regulations. Such matters that can be investigated include: impact of import and export of goods, technology and international service trade on the domestic industry and its competitiveness, trade barriers, etc.
6. Foreign Trade Remedies
“Foreign Trade Remedies” was another new section that was added, somewhat as an extension of “Foreign Trade Investigation”. This provides several detailed foreign trade remedial measures that may be adopted by the State in accordance with foreign trade investigation results.

Conclusion
These modifications, along with several others contained in the new Foreign Trade Law, have brought about improvements on many levels. Not only have these revisions fulfilled China’s WTO accession commitments, it has on a practical level helped China’s foreign trade law catch up with the many developments that have taken place in the international trade arena over the past ten years.

- Alex Yang