Beijing to impose exit bans for export control, tech transfer breaches

The Chinese government plans to implement exit bans for individuals found guilty of violating export controls or technology transfer regulations, as announced by the State Council on Friday. These measures will come into force on September 15. The Ministry of Commerce and other departments will enforce exit bans if the breaches "endanger national industrial or technological security."

The regulations also permit exit bans for officials who seek foreign nationality or residency, as well as Chinese nationals convicted of crimes overseas. The new restrictions come amid China's growing export controls on critical minerals, rare earths, and dual-use goods with both civilian and military applications. Beijing has been intensifying its efforts to curb the smuggling of these minerals, leveraging its dominant position in mining and processing.

In May 2023, China launched a multi-agency operation to combat smuggling, involving police, customs, and the country's top intelligence agency. Last year, 9,874 people were convicted for illegally exporting critical minerals. Recent high-profile cases highlight the government's determination to enforce these regulations, such as the detention of two Japanese nationals in Dalian in May 2023 for suspected smuggling of restricted rare earths and the conviction of 27 individuals in Shenzhen in December 2022 for illegally shipping over 166 tonnes of antimony, with sentences ranging from four months to 12 years.

The regulations also target technology transfers, particularly in strategic sectors like artificial intelligence and computer chips, reflecting Beijing's focus on preventing the export of know-how crucial to national security. This strategy was evident when Beijing blocked Meta's $2 billion acquisition of Chinese AI start-up Manus, which relocated to Singapore in 2022.

In March 2023, authorities banned the company's co-founders from leaving the country while regulators investigated potential violations of investment regulations. The new rules tighten enforcement against civil servants and military officials, who have traditionally faced restrictions on overseas travel and connections. Notably, military personnel are now included alongside civil servants, reflecting Beijing's efforts to ensure political loyalty within the People's Liberation Army and its ongoing anti-corruption campaign.

The restrictions may also aim to prevent intelligence leaks. Citizens who commit crimes abroad that endanger national security or China's interests may face an exit ban of six months to three years upon their return. These unprecedented restrictions mark a significant shift in China's approach to exit controls, following its aggressive crackdown on transnational cyber-fraud networks, which have resulted in tens of thousands of arrests and the execution of gang bosses.