Executive Summary
On May 12, 2026, the Standing Committee of China’s National People’s Congress (NPC, 全国人大常委会, Quánguó Réndà Chángwěihuì) released its 2026 Legislative Work Plan. The plan sets the agenda for laws to be introduced, revised, or deliberated this year — and the first major test of that agenda is happening this week. The NPC Standing Committee convenes its June 23–26 session right now, with first readings scheduled for three laws that directly affect foreign business operations: the revised Government Procurement Law and Bidding Law, the fifth revision of the Trademark Law, and the new Financial Law. Two more substantial reforms — a complete overhaul of the Enterprise Bankruptcy Law and the first comprehensive revision of the Tax Collection and Administration Law in over 20 years — are advancing through the pipeline.
What makes this year’s agenda different from previous legislative cycles is the scope and coordination. Five separate laws are being rewritten simultaneously, each touching a different corner of the foreign business operating environment: procurement access, brand protection, financial regulation, insolvency, and tax enforcement. Together, they represent the most consequential legislative quarter for foreign-invested enterprises since the Foreign Investment Law took effect in 2020. This article examines what’s in each law, why it matters to your business, and what you should do about it — before the final votes.
The Context: Why 2026 Is Different
China does not lack for laws. The problem — and the reason this year’s agenda deserves attention — is that many of the statutes now under revision were written for a different economy. The Government Procurement Law dates to 2002. The Enterprise Bankruptcy Law was enacted in 2007, before China’s outbound investment boom and before the complex offshore holding structures now common for foreign investment became standard. The Tax Collection and Administration Law has not seen a comprehensive revision in more than two decades, during which China’s digital economy has transformed how transactions are recorded, reported, and audited.
The 2026 agenda is effectively a modernization push. The State Council and NPC are aligning multiple legal frameworks with three realities: the digitization of commerce, the cross-border nature of modern supply chains, and China’s continued integration with global capital markets. For foreign businesses, that creates both opportunity and exposure. Laws written to be more internationally compatible also bring extraterritorial reach, heavier data-driven supervision, and new compliance obligations that did not exist when your China entity was originally set up — a pattern we analyzed in our coverage of SAMR’s extraterritorial M&A review framework and Tianjin FTZ’s cross-border data rules.
This is not legislative theater. The NPC Standing Committee meets every two months, and when a draft receives its first reading at a session — as three laws are receiving this week — the clock starts. Second readings typically follow within 4–6 months. Final passage within the calendar year is realistic for laws that reach a second reading without major controversy. By December 2026, at least three of the five laws on this agenda could be enforceable.
Deep Analysis: Five Laws, Five Impact Zones
1. Government Procurement and Bidding Law: The Access Question
This is the first time since 2002 that the Government Procurement Law and the Bidding Law are being revised together. For two decades, the two statutes operated in parallel, creating overlapping scope and inconsistent standards. The Ministry of Finance (MOF, 财政部) oversees procurement; the National Development and Reform Commission (NDRC, 国家发改委) oversees tendering and bidding. Companies selling to China’s public sector — a market estimated at over RMB 3.2 trillion (approximately US$440 billion) annually — have had to navigate both regimes, often with conflicting interpretations.
The draft amendments aim to draw a clear boundary between the two laws and unify rules across the full project lifecycle, from approval through payment. The draft also introduces a clarification mechanism for abnormally low bids, requiring bidders to justify pricing that could jeopardize contract performance. This provision directly addresses a long-standing complaint from foreign suppliers: domestic competitors undercutting bids with unsustainable pricing, then delivering substandard work.
The unresolved question — and the one that matters most for foreign manufacturers and service providers — is how “Made in China” will ultimately be defined. A September 2025 State Council notice introduced a framework for defining “domestic products,” but detailed product-level criteria — including local content thresholds and key component requirements — are still being developed. The government has signaled a three- to five-year transition period. If your products rely on imported components above a certain threshold, you may find yourself outside the procurement preference zone.
What’s at stake: access to government contracts worth hundreds of billions of dollars per year, conditional on localization decisions you make now.
2. Trademark Law: The Bad-Faith Filings Crackdown
The draft revision to China’s Trademark Law (商标法, Shāngbiāo Fǎ) had its first reading in December 2025 and is scheduled for its second reading at this week’s session. This is the law’s fifth revision since 1983, but crucially, it’s the first carried out as a full “revision” (修订) rather than a piecemeal “amendment” (修正) — a legal distinction in China that signals structural overhaul, not incremental fixes.
Three changes deserve your attention. First, Article 18 of the draft establishes grounds to refuse a trademark application filed without genuine commercial intent. This targets the trademark squatting industry, which has been a persistent problem for foreign brands. As recently as 2024, the China National Intellectual Property Administration (CNIPA) reported rejecting over 38,000 bad-faith trademark applications in a single year. The new provision gives examiners statutory authority to reject filings upfront, rather than forcing genuine owners to challenge squatted marks through costly opposition proceedings after registration.
Second, the draft introduces penalties for malicious filing or misleading use of registered trademarks (Articles 53 and 56). This shifts the cost calculus for squatters, who previously faced little downside beyond losing the mark. Third, the opposition window for challenging published applications shrinks from three months to two months, accelerating the registration timeline but raising the stakes for companies that monitor filings only sporadically.
The reform also expands registrable mark types to include motion, sound, color, position, and hologram marks for the first time. If your brand uses animated logos, sonic branding, or distinctive product packaging colors, these are now protectable — but only if you file first. China remains a first-to-file jurisdiction.
3. Financial Law: One Framework to Rule Them All
The draft Financial Law (金融法, Jīnróng Fǎ) is scheduled for its first reading at this week’s session. Released for public comment on March 20, 2026 by five financial regulators — including the People’s Bank of China (PBOC), the National Financial Regulatory Administration (NFRA), and the China Securities Regulatory Commission (CSRC) — this is an entirely new statute designed to bring sectors previously governed by separate legislation under a single framework.
The most significant provision for foreign businesses: penalties for offshore funds or platforms that serve Chinese customers without approval. The language is deliberately broad, covering foreign-invested institutions and foreign branches. If your company offers financial services — whether lending, payments, wealth management, or insurance — to customers in China through an offshore entity, this law could bring you within China’s regulatory perimeter, even if you have no physical presence on the mainland.
The law also formalizes data-driven financial supervision, giving regulators statutory authority to demand transaction data, customer records, and operational metrics from financial institutions operating across borders. This parallels the approach taken by the EU’s Digital Operational Resilience Act (DORA) and signals China’s intention to align its financial supervision with global standards — while extending its reach to offshore activities.
For foreign fintech companies, cross-border payment providers, and any business using offshore structures to serve China-based customers, the compliance implications are immediate. Mapping China-facing activities against the new supervisory scope is not a future exercise — it’s the work that determines whether your current operating model remains viable.
4. Enterprise Bankruptcy Law: Cross-Border Insolvency Arrives
China is undertaking the first major overhaul of its Enterprise Bankruptcy Law (企业破产法, Qǐyè Pòchǎn Fǎ) since its enactment in 2007. The draft revisions introduce a cross-border insolvency framework that would allow Chinese courts to exercise jurisdiction over offshore-incorporated companies whose principal assets or operations are located in China. The draft also clarifies procedures for recognizing foreign bankruptcy proceedings, subject to reciprocity and safeguards for domestic creditors.
This is a structural shift. Currently, a foreign company with significant China assets that enters insolvency proceedings in, say, a US or UK court faces a legal vacuum: Chinese courts have no statutory mechanism to recognize or coordinate with the foreign proceeding. Assets on the mainland sit in limbo, inaccessible to creditors and administrators. The new framework creates a channel for judicial cooperation and cross-border restructuring.
The practical implications are substantial. If your company uses an offshore holding structure — Hong Kong, the Cayman Islands, or the British Virgin Islands are standard for foreign investment into China — and that holding company enters restructuring, Chinese courts could now assert jurisdiction over the China-based operating entities. Similarly, foreign creditors in a Chapter 11 or UK administration proceeding could seek recognition and enforcement in China for the first time.
However, the law is not yet scheduled for a reading at this week’s session. It remains in the pipeline, with no fixed timeline for first reading. The significance of the reform justifies monitoring it now, but the practical window for preparation is longer than for the laws receiving readings this week.
5. Tax Collection and Administration Law: The Anti-Avoidance Rule
This will be the first comprehensive revision of the Tax Collection and Administration Law (税收征收管理法, Shuìshōu Zhēngshōu Guǎnlǐ Fǎ) in more than 20 years. The draft introduces a general anti-avoidance rule (GAAR) covering all taxes, requiring that business arrangements have a genuine commercial purpose rather than a primarily tax-saving purpose. This aligns China’s tax framework with the OECD’s Base Erosion and Profit Shifting (BEPS) standards, which China formally adopted in 2022.
For foreign companies, the GAAR is the headline provision. Transfer pricing arrangements, royalty structures, management fee allocations — any arrangement that reduces China taxable income without a commercial rationale — now face statutory challenge, not just administrative audit. The draft also introduces mandatory big-data cross-checking, requiring online platforms to report seller tax information directly to authorities, and gives electronic invoices full legal validity for the first time.
One important procedural change: the draft removes the requirement to pay disputed tax before applying for administrative reconsideration. Currently, if the tax bureau assesses additional tax of, say, RMB 5 million, a company must pay the full amount before it can challenge the assessment. Removing this requirement gives companies a meaningful right of appeal — a change that foreign chambers of commerce have advocated for years.
Impact Assessment: What Changes, and When
The five laws create three tiers of urgency for foreign businesses:
Tier 1 — Immediate action required (Q3–Q4 2026): The Trademark Law is at its second reading this week and could pass by year-end. If your brand portfolio includes marks that exist only as defensive registrations without active use in China, audit them now. The new use requirements create vulnerability for unused marks. Similarly, if you have been monitoring trademark filings quarterly rather than monthly, the shortened two-month opposition window requires a faster monitoring cadence.
Tier 2 — Preparation window open (2026–2027): The Government Procurement Law and Bidding Law could pass within 2026. If your China revenue includes any public-sector contracts, begin evaluating your supply chain against anticipated local content thresholds. A three-to-five-year transition period sounds generous, but reconfiguring supplier relationships and manufacturing footprints takes longer than most companies expect — 18 to 36 months is typical for a meaningful supply chain shift in China.
Tier 3 — Monitoring phase (2026–2028): The Financial Law, Enterprise Bankruptcy Law, and Tax Collection Law are at earlier stages. The Financial Law is receiving its first reading this week; final passage is unlikely before mid-2027. The Bankruptcy Law has no reading scheduled. Use this window to map your China-facing activities against the new frameworks and identify exposure points before the legislative clock accelerates.
Cross-cutting theme: All five laws share a common thread — the shift from form-based to substance-based regulation. Trademark use requirements, tax anti-avoidance rules, financial services extraterritoriality, procurement local content standards — each requires demonstrating genuine commercial substance, not just legal form. Companies whose China operations exist primarily as contractual arrangements with limited on-the-ground presence should anticipate closer scrutiny across multiple regulatory dimensions.
Actionable Recommendations
Here is what you should do, in priority order, based on what we know on June 26, 2026:
1. Trademark portfolio audit (by September 2026). Review every China trademark registration. For each mark, document evidence of commercial use in China: sales data, marketing materials, distribution agreements, e-commerce listings. Marks without documented use are exposed to challenge under the new provisions. If you identify gaps, initiate use-generating activity — a modest production run, a limited distribution agreement, or an active e-commerce listing can establish the commercial intent required.
2. Procurement supply chain mapping (by Q1 2027). For any product or service your company sells to Chinese government entities, state-owned enterprises, or public institutions, map the full component and service origin. Identify where imported content exceeds plausible local content thresholds. Develop a scenario plan for localization — which components can be sourced in China, at what cost differential, and on what timeline. The transition period will not wait for you to figure this out.
3. Financial services exposure review (by Q2 2027). If your company provides any financial or quasi-financial services to China-based customers — including through Hong Kong or other offshore entities — map each activity against the draft Financial Law’s supervisory scope. Cross-border lending, payment processing, wealth management, and insurance distribution are all potentially in scope. The extraterritorial language is broad enough that even services provided by foreign parent companies to China subsidiaries could be captured.
4. Tax structure substance check (by Q2 2027). Review intercompany arrangements — transfer pricing policies, royalty agreements, management service fees, and IP licensing structures — against the general anti-avoidance rule’s “genuine commercial purpose” standard. If any arrangement exists primarily to reduce China taxable income, restructure it now. Voluntary adjustment before the law takes effect is significantly less expensive than an adverse finding after.
5. China entity governance review (ongoing). The substance-over-form shift across multiple laws means that how your China entity is structured, staffed, and operated matters more than ever. A WFOE (外商独资企业, Wàishāng Dúzī Qǐyè) with three employees, no independent management, and all key decisions made at headquarters is structurally vulnerable under the new frameworks. Evaluate whether your China entity passes a substance test — real management, real operations, real decision-making — across procurement, tax, and financial regulatory dimensions.
One Number to Remember
Five laws, five readings in one year. China’s legislative system typically processes one or two major economic laws per year. The fact that five statutes directly affecting foreign business operations are advancing simultaneously — three receiving readings at a single session — represents an unusual concentration of regulatory energy. The signal is clear: China is systematically rewriting the legal infrastructure that governs foreign business, and it is doing so on an accelerated timeline. The businesses that adapt early will have operating models designed for the new framework. The ones that wait will have operating models designed for an old framework that no longer applies.
— China Gateway 360 —
Remote China market entry support, built around execution.