China imposes new rules to block foreign companies from ‘decoupling’
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China has introduced new regulations to prevent foreign companies from reducing their dependence on Chinese suppliers. The rules, which took effect on April 7, allow regulators to investigate and punish companies that stop using Chinese suppliers due to political pressure at home.
China has imposed new rules to block foreign companies from reducing their dependence on Chinese suppliers. The regulations, signed by Premier Li Qiang on April 7, aim to prevent what China sees as rising protectionism in the West. Foreign business groups have expressed concern about the vaguely worded rules, which could make it harder for companies to divest from joint ventures in China or shift orders to overseas suppliers. The new rules supplement the existing authority of Chinese regulators to investigate multinational corporations for moving supply chains out of China. Regulators can now question employees and examine corporate records during investigations. The rules also allow authorities to bar companies and individuals from leaving China if they are suspected of moving supply chains elsewhere under foreign pressure.
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