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Why is nobody talking about China’s new supply chain regulations?
Kelly Barner : May 21, 2026
China’s Decree 834 and Decree 835 are related to the country’s efforts to ensure the security and resilience of its supply chain.
Decree 834 contains a number of protective measures for Chinese supply chains and companies, and 835 contains measures that may be enforced against foreign entities that China believes are threatening its supply chains and companies.
Together they are known as the Regulations on Industrial and Supply Chain Security, or simply “The Regulations”
These measures were first introduced in April of 2026. They took effect immediately - with no notice and no transition period. In fact, they are in effect right now.
What counts as a threat?
If a foreign company does anything to threaten the stability of Chinese companies or supply chains, they may be in violation of The Regulations. But what constitutes a threat?
The answer to that question is a scary one - because most companies sourcing globally are likely in violation.
Threats include:
- Moving business away from a supplier based in China
- Reshoring production from China to the United States or Europe
- Complying with regulations like the UFLPA (Uyghur Forced Labor Prevention Act) in the U.S. or the European Industrial Accelerator Act in the EU
Put simply, complying with the laws in one country (e.g. the U.S. or EU) may make a company non-compliant with China’s new Regulations.
Even data collection and reporting can see a company running afoul of The Regulations. Decree 834, Article 13 explains that activities including supplier due diligence, audits, questionnaires, and on‑site inspections are now subject to greater regulatory scrutiny.
It does not matter what country’s laws require the activities or why they are being done. It also doesn’t prohibit the audits, etc. themselves, but it does focus additional attention on the data being gathered, and therefore the conclusions being drawn from it.
Lack of Definition Could Equal Broad Enforcement
Interestingly, these regulations don’t just apply to foreign countries currently doing business in China. They also apply to China-owned companies operating abroad, especially companies that are sometimes trying to look like independent operations.
According to Inc.com, “Companies with ‘Chinese DNA’ that are trying to outsource themselves so they can operate abroad as companies from another country would be subject to ‘look through’ enforcement.”
Anyone that owns, runs, or operates one of those companies is subject to new scrutiny by China. And, by extension, if you buy from or do business with one of those companies, you have not distanced yourself from China as much as you think.
Even companies that want to comply with China’s new regulations will find it challenging.
According to Mayer Brown, “Several of the concepts—including “improper extraterritorial measures,” “appropriate connection,” “normal market transaction principles,” and “discriminatory measures”—are undefined.”
This gives Chinese regulators concerningly broad discretion for enforcement.
Maintaining Global Dependence
The penalties for business decisions that before April looked like normal strategies include losing access to China as a market. Companies may also be subject to civil litigation and designation as “malicious entities.”
The scariest part of all is that sanctions and enforcement apply to individuals doing business in or with China in addition to the companies they work for. Keeping personnel on the ground in China safe is a concern, as exit bans are a possibility, where foreign business people would be prevented from leaving the country.
In conclusion, despite the scant coverage of Decree 834 and 835, they are already in effect.
Reshoring, China+1, or compliance with laws such as the UFLPA could be interpreted by China as threats to its industrial security. Businesses could find themselves unable to simultaneously comply with U.S. and EU regulations and China’s new rules, creating operational, legal, and ethical conflicts.
This may represent a major turning point in global supply chain governance. What China describes as “supply chain security” may actually be intended to maintain global dependence on Chinese production.
And if we don’t know about The Regulations… we’re already behind.