China governs the import and export of technology under the Regulations for the Administration of the Import and Export of Technology (“Technology Regulations“), the Measures for the Administration of Technologies Prohibited or Restricted from Import, and the Measures for the Administration of Technologies Prohibited or Restricted from Export.  The Technology Regulations and related measures are separate and distinct from other China regulatory regimes that currently govern the import and export of dual-use items and encryption technologies.

On 28 August 2020, China’s Ministry of Commerce (“MOFCOM“) and Ministry of Science and Technology (“MOST“) jointly issued Announcement [2020] No. 38 (“Announcement“) to amend the Catalogue of Technologies Prohibited or Restricted from Export (“Catalogue“). The Catalogue was last updated in 2008. The amendments to the Catalogue came into effect on 28 August 2020.

The Announcement amends the Catalogue through adding 23 categories of technologies to the list of technologies restricted from export, modifying the control parameters of 21 categories of technologies already included on such list, and removing 4 and 5 categories of technologies from the lists of technologies prohibited and restricted from export, respectively.

Of particular note is the modification of the control parameters for “information processing technologies.” Export of the following technologies are, as a result, now restricted: artificial intelligence interactive interface technologies, personalized information recommendation service technologies based on data analysis, speech synthesis and evaluation technologies, and scanning and photo recognition technologies. Newly added categories of technologies, the export of which is restricted as a result of the amendments, include cryptographic security technologies, information countermeasure and defense technologies, breeding technologies, laser technologies, and space and aerospace-related technologies, amongst others. Categories of technologies which have been removed from the Catalogue pursuant to the amendments include certain types of chemical and drug production and processing technologies, as well as firewall software technologies.

Where a technology is listed as subject to export restrictions, a Letter of Intent on Technology Export Licensing must first be obtained from relevant authorities before an entity or individual can conduct “substantive negotiations,” or enter into legally binding commitments, with respect to export of the technology. Export of technology generally refers to the transfer of technology from China’s territory to overseas, whether through trade, investment, or economic and technological cooperation. A technology export contract must be signed within the validity period of the Letter of Intent, once granted, and before the technology is actually exported, i.e. by way of technology transfer, a Technology Export License will need to be obtained. Under China’s regulations, in determining whether to grant a Letter of Intent, the authorities will engage in a trade and technical examination of the proposed technology export, involving a review as to whether the proposed export is in conformity with, e.g., China’s foreign trade, industrial export, and technological development policies.