Sinica · China
TIER 4 Mon, 4 May 2026 14:01:30 +0000
Beijing's anti-sanction toolkit just got two powerful new additions. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ | | ---|---|--- | | | Forwarded this email? Subscribe here for more --- --- # Trivium China Weekly Recap | Caught in the Crossfire | | Andrew Polk --- | May 4 --- | --- --- | | | --- | | --- | | --- | | --- | | READ IN APP --- **Beijing 's anti-sanction toolkit just got two powerful new additions.** Earlier this month, within a single week, the State Council released two regulations that sharply expand how Chinese authorities can push back against foreign sanctions, export controls, and extraterritorial enforcement: * Regulations on Industrial and Supply Chain Security (RISCS), released on April 7 * Regulations on Countering Improper Foreign Extraterritorial Jurisdiction (RCIFEJ), released on April 13 **Don 't mistake the back-to-back rollout for a knee-jerk reaction to external events. **These are the latest moves in a multi-year effort to harden China's anti-sanction architecture. * Both regulations were approved at a State Council executive meeting in March, and drafting almost certainly began in 2025. * They come from Beijing's sober, long-term assessment of just how exposed China's industrial economy is to Western pressure. **The new regulations target two pain points Beijing has long struggled to address cleanly:** How to prevent foreign governments from reaching Chinese companies under their own domestic laws, and how to prevent foreign actors from severing key links in China's supply chains. * Taken together, they represent multiple new tripwires for foreign companies. **RISCS is China 's first dedicated supply chain security regulation, giving the state legal cover to penalize foreign actors for disrupting Chinese supply chains** -**** with potential countermeasures spanning immigration, trade, investment, international cooperation, and foreign aid. * It also tightens scrutiny of research into Chinese supply chains, complicating MNCs' efforts to map and manage their sourcing and third-party risk. * What's more, it grants the state emergency powers to compel businesses - including multinationals operating in China - to produce goods deemed critical to "economic, social, and national security." **The language is deliberately vague** - covering foreign actions that "violate normal market principles, interrupt normal transactions, or impose discriminatory measures causing substantial harm to Chinese supply chain security." * That's broad enough to catch foreign companies that exit Chinese supply chains in ways that harm domestic producers, or withhold key components under home-country export controls - and even companies in control of global transport nodes that act in ways deemed to disadvantage Chinese industry. **RCIFEJ empowers the Ministry of Justice to designate specific foreign laws or enforcement actions that Beijing wants to block.** * Once designated, all entities and individuals in China are prohibited from complying. * The Malicious Entity List adds visa bans, asset freezes, and trade restrictions for foreign businesses tied to formulating or enforcing those measures. **The regs mostly target government actors - but the lobbying clause is the kicker.** * A new Malicious Entity List creates a mechanism for visa bans, asset freezes, and trade restrictions against foreign businesses involved in formulating or enforcing the listed measures. **So what 's next?** **Beijing 's best-case scenario is that the regs' existence alone will serve as a compelling deterrent.** * By putting foreign businesses on the hook in China and threatening foreign governments with trade and investment countermeasures, Beijing hopes to dampen the appetite for new anti-China sanctions and export controls. **That said, Beijing will likely take some action to show it means business** - but not so much that it hands China hawks new ammunition to push for faster decoupling. **So we expect early tests of both regulations - but carefully calibrated ones.** * Beijing's likely opening move will be to launch investigations against a handful of government actors as early warning shots, without imposing formal penalties. * Companies are likely safe for now, given the collateral damage to foreign investment and China's business environment that hitting them would entail. **Get smart:** Regardless of whether Beijing ever follows through, the risks to foreign companies just went up a notch. * Companies should map their exposure now - sourcing decisions, relocation plans, and even lobbying efforts could all fall into Beijing's crosshairs. **The bigger picture:** Beijing is going on the front foot to protect its industrial base - and the work here's far from done. * Get in touch if you need help with wargaming your China exposure. _**Ether Yin, Partner and Head of Policy Research, Trivium China**_ ## **What you missed** ### **Foreign affairs** **China 's strategic patience with the EU is showing signs of strain.** * On April 17, China's commerce ministry (MofCom) warned of retaliation if the EU moves forward with cybersecurity regulations that exclude Chinese tech products from EU markets. * Then, on April 24, MofCom placed seven EU entities on its export control list. * Finally, on Monday, MofCom took aim at the EU's proposed Industrial Accelerator Act (IAA), blasting the law as "institutional discrimination" and warning of possible countermeasures. ### **U.S.-China** **On Wednesday, a group of 73 House Democrats signed a letter to US President Donald Trumpurging him not to allow the import of Chinese cars to the US, warning of "profound and irreversible" damage to US automakers.** * In January, Trump told the Detroit Economic Club that he was open to Chinese carmakers entering the US, saying: _" I love that. Let China come in."_ * Trump could strike a deal to open the US auto market to Chinese participation during his upcoming state visit to China. * This could see high-quality, competitively priced Chinese EVs enter the US market, giving American automakers a run for their money. ### **Econ and finance** **An influential policy adviser is calling on Beijing toload up on off-balance-sheet debt to juice the economy.** * Yin Yalin believes consumers are stuck in a negative feedback loop, where sluggish income growth leads to weak consumption growth - which in turn undermines income growth. * Fiscal support was heavily front-loaded in Q1, and much of Beijing's budgeted firepower for the year will be exhausted by end-June. * To avoid a fiscal cliff later in the year, Yin called for: _" Studying options to expand ultra-long special treasury bond issuance in H2 to fund follow-on investment projects."_ ### **Tech** **On April 24, DeepSeek finallyshipped its latest model - V4.** * Despite the hype, the new model landed flat: It clearly lags behind leading US models, and it's not even obvious that it beats top domestic rivals. * However, V4 does come with deeper integration with Chinese chips - especially Huawei Ascend - and introduces a new model architecture designed to squeeze more out of limited compute. **On April 26, the Central Committee and State Council jointly released a high-level policy directive on strengthening the management of"new employment groups."** * That covers China's roughly 84 million platform workers, including delivery riders, couriers, and ride-hailing drivers. * Through this policy, the Party is officially recognizing gig workers as a collective and distinct labor demographic. * That places gig workers alongside other major labor demographics like factory workers, service industry workers, and migrant workers, meaning they can benefit from targeted policy support. ### **Commodities** **On Tuesday and Wednesday, multiple outlets reported that state-owned oil majorsSinopec and CNPC are applying for permits to export gasoline, diesel, and jet fuel.** * Beijing reportedly ordered a freeze on refined fuel exports in early March, halting shipments that had not cleared customs. * The move exacerbated shortages in parts of Asia, prompting several governments to quietly seek relief from Beijing. ### **Politics** **For the first time in decades,an outsider is set to lead the Ministry of Agriculture and Rural Affairs (MARA).** * On Wednesday, the Central Organization Department announced Zhang Zhu as MARA's new Party secretary, replacing Han Jun. Zhang will likely be appointed as minister soon. * Zhang has a very different profile from the last three MARA bosses - he has never worked in the central government, nor held a top provincial job. * By contrast, all of Zhang's predecessors since 2009 had experience governing a province, and all had spent decades shaping agricultural policy within central institutions. **As always, it was a busy week in China.** * Thank goodness Trivium China is here to make sure you don't miss any of the developments that matter. _You 're currently a free subscriber to Sinica. Please support the work that I'm doing and upgrade to paid. 非常感谢！_ Upgrade to paid --- | | | Like --- | | Comment --- | | Restack --- (C) 2026 The Sinica Podcast 548 Market Street PMB 72296, San Francisco, CA 94104 Unsubscribe