Photo: Sipa USA/picture alliance

China has introduced new regulations that expand its ability to influence global supply chains and penalize companies that reduce their dependence on Chinese manufacturing, creating fresh challenges for Western firms operating across the US, EU and China.

According to recent reports, Beijing’s new framework allows authorities to respond against companies that move production to countries such as Vietnam or India, or that shift manufacturing back to domestic markets in the West. Firms could also face restrictions if they comply with US or EU sanctions and export controls targeting Chinese entities, News.Az reports, citing Deutsche Welle.

The measures follow earlier actions, including the blocking of a $2 billion Meta acquisition of the AI startup Manus, which China considered strategically important despite its Singapore headquarters. Beijing cited national security concerns in that decision.

The new rules are part of broader “de-risking” tensions between China and Western economies, as governments in Europe and the United States attempt to reduce reliance on Chinese supply chains. This trend has accelerated since the pandemic and further intensified after new US tariffs on Chinese goods in 2025.

European policymakers have also introduced initiatives such as the Industrial Accelerator Act to reduce dependency on Chinese imports and counter state-subsidized competition. However, analysts warn that China’s latest policies may complicate these efforts by increasing pressure on multinational companies.

Industry representatives say the overlapping rules from different jurisdictions are creating compliance risks for global businesses. Companies may find themselves unable to satisfy conflicting legal demands from China, the United States and the European Union at the same time.

Experts note that Beijing has increasingly used export controls and supply chain restrictions, including on rare earth materials critical for electric vehicles and advanced electronics, as part of its broader economic strategy.

At the same time, European officials remain divided over how strongly to respond, as trade ties with China remain significant despite a growing trade imbalance.

Analysts warn that the new Chinese measures could further deepen fragmentation in global trade, forcing multinational companies to navigate an increasingly complex and politically sensitive economic environment.

News.Az 

By Leyla Şirinova