Trade & Exports

China's trade-policy centre of gravity shifted this round from defending against imports to controlling what leaves. On 16 October MOFCOM and the Ministry of Science and Technology opened public consultation on adding 40 technologies to the Catalogue of Technologies Prohibited and Restricted from Export — 23 in artificial intelligence, 5 in biomedicine and 12 in solar PV — and imposed pre-export registration on the relevant technologies with immediate effect ¹. This is a supply-side instrument aimed at the same manufactured goods that carry China's surplus and attract foreign overcapacity complaints, and it is the more consequential development than anything on the import-remedy side this cycle.

The design is surgical rather than blanket. The AI block (large models, agents, compute clusters, information processing) excludes technology that has already entered the public domain through open source or academic publication. The biomedicine block (cell and gene therapy, small nucleic-acid drugs, pathogens) gives automatic licensing and facilitation to out-licensing models that do not transfer ownership. The PV block covers polysilicon, wafer and cell manufacturing plus the key and core equipment that embodies those techniques ¹. Read together, the three carve-outs preserve ways to keep earning from licensing and open-source distribution while ring-fencing frontier know-how. Comments run from 16 October to 15 November 2026, so the list is a draft, not yet law.

The PV slice is the strategically loaded one. Solar is the sector where Chinese capacity has drawn the heaviest overcapacity charges and anti-dumping exposure abroad; controlling the export of polysilicon, wafer and cell-manufacturing technology plus their core equipment is a way to defend industrial advantage rather than a defensive trade remedy. It sits alongside, not instead of, the existing licensing architecture — the 2027 auto and motorcycle export-licence regime, which still demands proof of overseas after-sales and repair networks ², and the precursor-chemicals catalogue that routes US, Mexican, Canadian, Myanmar, Lao and Afghan buyers through licensing ³.

The underlying goods figures are unchanged. SAFE's second-quarter balance of payments shows a goods surplus of $278.8bn and a current account surplus of $193.7bn, with H1 current account at $378.0bn ⁴; August's goods surplus was $116.3bn against a services deficit of only $21.8bn ⁵. Goods still carry essentially the entire surplus, which is why the composition of exports — and now the technology embedded in them — is where policy is concentrating. The offset remains the least-read part: a capital and financial account deficit of $157.1bn in Q2 and $345.2bn in H1 closely matched the current account, meaning China runs the surplus and lends the proceeds abroad ⁴.

On the remedy front, the open test from last round is answered negatively so far. MOFCOM's 3 October anti-dumping investigation into EU p-nitrotoluene, opened on a 14 September petition by Jiangsu Huaihe Chemical and Hubei Dongfang Chemical ⁶, has not been followed by a wider wave of filings in this batch. Beijing remains a plaintiff in one narrow case rather than a broad complainant; the escalation instead came on the export-control leg.

The diversification playbook continues in parallel. The 140th Canton Fair opens on its 70th anniversary with 32,000 exhibitors, over 11,000 of them “specialized, refined, differentiated, innovative” (专精特新) firms or single-product champions, and the 9th CIIE opens 5 November with free booths for least-developed countries and an upgraded Asia-Africa zone to capture zero-tariff benefits ⁷. The new China-DPRK Yalu River bridge opened 15 October to lift bilateral trade and people flows ⁷, and Putin is confirmed for November's APEC leaders' meeting in Shenzhen ⁸. Beijing is also wielding transactional levers directly: on 12 October it froze the assets of Belize's foreign minister Francis Fonseca, barred Chinese entities from transacting with him and denied him entry under the Anti-Foreign Sanctions Law over Belize's Taiwan ties ⁹.

Two limits bound the reading. The technology catalogue is a consultation document, and it is unresolved whether PV equipment exports — which underpin much Belt-and-Road solar build-out — survive the final list or are softened in the comment period. And the H1 2026 Balance of Payments Report is published but its detailed tables remain unpopulated, so the portfolio-versus-direct-investment split of the capital outflow is still open ¹⁰. The test now is whether the revised catalogue is finalised after 15 November and how far it reaches into equipment, and whether MOFCOM's remedy filings stay confined to p-nitrotoluene.