Export Control, Market Access, and Carbon Footprint

Ministry of Commerce (MOFCOM) and General Administration of Customs announced export controls on 17 rare earth elements include Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium effective from April 4. These elements have now also been added to China’s (consolidated) export control list.  

The new export controls on key rare earth elements may impact supply chains in advanced manufacturing, semiconductors, and new energy vehicles. Compared to other export control restrictions recently, this is a bolder step now. German companies relying on these materials should closely monitor upcoming policy updates, assess supply chain risks, and prepare early for export licensing and documentation to avoid disruptions.

German Chamber members watch out: We have a flash survey on the impact of the trade conflict escalation open now (until April 17).

The State Council approved MOFCOM’s Work Plan for Accelerating Comprehensive Pilot Programs for the Opening-Up of the Service Sector. The pilot program will now expand to nine additional cities: Dalian, Ningbo, Xiamen, Qingdao, Shenzhen, Hefei, Fuzhou, Xi’an, and Suzhou.

Previously, the program covered 10 cities and the entire Hainan province. This latest expansion aims to further ease foreign investment restrictions in sectors such as tourism, medical services, and elderly care. We expect a series of incremental measures throughout the year to attract direct foreign investment. German companies should keep a close eye on developments in this area.

MOFCOM and eight other departments issued a notice to promote nationwide adoption of successful practices from China’s service sector opening-up pilots. The notice outlines a nationwide implementation of measures previously tested in selected regions to enhance logistics and customs efficiency, such as establishing regular cross-border truck routes, and streamlining customs clearance.

China is seeking to stabilize exports through improved logistics infrastructure and cross-border efficiency in light of rising global trade tensions. While the impact may be limited in the short term, we welcome continued opening-up efforts, which also benefits German businesses in China.

The Beijing government has issued its 2025 plan to promote the high-quality development of innovative pharmaceuticals. Key measures for foreign companies include support for cross-border drug production by overseas marketing authorization holders (MAHs), expanded imports of rare disease drugs and urgent-use medical devices, promotion of industrialization and large-scale application of major pharmaceutical and medical device products in China, and enhanced overseas intellectual property (IP) protection with a potential fast-track mechanism for dispute resolution.

Beijing is stepping up efforts to support the high-quality growth of innovative pharmaceuticals. This presents opportunities for German healthcare companies offering high-quality products. However, it remains to be seen how effectively these measures—particularly faster market entry for rare disease drugs & high-end medical device and improved IP support—will be implemented at the ground level.

The Ministry of Ecology and Environment released the draft Quantification Method and Requirements for Product Carbon Footprint (Greenhouse Gas). The draft aims to accelerate the development of carbon footprint accounting standards for some categories of products and further improve the national environmental standards system, covering flat glass, general silicate cement, solar modules, light electric vehicles, and power batteries. 

This is another policy draft supporting China’s goal to peak carbon emissions by 2030. It also signals a clear move toward greater regulatory alignment with global carbon accounting practices. We recommend German companies to closely monitor the finalization of these standards and prepare to update carbon footprint reporting frameworks, particularly where requirements may affect supply chains and product design processes.

The Beijing government issued The Implementation Plan for the Comprehensive Reform of Facilitating Cross-border Data Flow. The plan includes formulating a second batch of negative lists, identifying important data in key sectors, and piloting their applicability beyond free trade zones for selected companies. It specifically targets cross-border data flows in sectors such as AI, autonomous driving, shipping, and manufacturing.

Beijing city has consistently played a leading role in cross-border data governance with its first pilot zone for implementing a negative list for data exports, followed by Tianjin and Shanghai. We welcome Beijing’s continued efforts and encourage to accelerate the process with more regions in China across a wider range of industries. This would provide greater clarity and predictability for German businesses to better navigate cross-border business operations.

The State Taxation Administration announced an upgrade to the tax refund policy for foreign tourists. The new policy allows foreign visitors to instantly claim value-added tax (VAT) rebates at tax-free stores and reuse the refunded amount immediately for further shopping. This is valid for the entire country and not restricted to departure in selected pilot regions.

This also can be seen as another effort by Chinese authorities to boost domestic consumption. Last year, China announced the stay duration for foreign nationals eligible for visa-free transit has been extended to 240 hours (10 days). Both the visa-free policy and this latest tax refund update reflect continued progress in attracting more foreign visitors to spend in China. The Chinese government is actively seeking the opinions on how to further encourage foreigners to spend in China. We expect to see other moves soon.