A recent article by Freshfields titled “China’s new 2026 Supply Chain Security and Counter-Extraterritoriality Rules: What Companies Need to Know and how to React”, and published by BIIA on June 17th, caught my attention.
A recent article by Freshfields titledThis is far more than a supply-chain compliance update. China’s new 2026 Supply Chain Security and Counter-Extraterritoriality Regulations represent another major step in the global shift from open commercial transparency toward information sovereignty and economic security.
This is not an entirely new development. BIIA has been monitoring the evolution of China’s economic-security framework since 2020 through developments in ratings disclosure, data governance, cybersecurity regulation, supply-chain transparency, and cross-border information controls. The recent Freshfields analysis highlights the latest stage of this process, demonstrating that China’s new framework is not merely administrative. It creates a legal architecture through which Beijing can scrutinize, restrict, or retaliate against foreign information-gathering, sanctions compliance, ESG due diligence, procurement reviews, and supply-chain investigations connected to China.
At the centre of this development is China’s emerging economic defence architecture.
Decree 834 on Industrial and Supply Chain Security and Decree 835 on Countering Foreign Extraterritorial Jurisdiction appear designed to protect China’s strategic industries and supply chains from external pressure. The question is whether this represents the culmination of the process or merely another stage in a broader policy evolution. Given the direction of travel over the past five years, further measures seem entirely possible.
China is responding to more than one pressure point. The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), forced-labour regulations, deforestation rules, U.S. sanctions, export controls, and geopolitical supply-chain screening initiatives all require companies to collect increasing amounts of information from suppliers and business partners. Beijing appears to regard some of these requirements as forms of foreign regulatory intrusion into China’s economic sovereignty.
From an information-industry perspective, however, the roots of this trend extend much further back. Foreign rating agencies, lenders, insurers, and investors have long faced limitations in obtaining detailed information about Chinese companies. What began as concerns over corporate disclosure and ratings transparency has gradually evolved into a broader assertion that information itself is a strategic national asset.
China is not alone in challenging extraterritorial regulation. Indonesia and Malaysia have strongly objected to aspects of European deforestation regulations, arguing that they impose extensive data, traceability, and reporting obligations on exporting countries. This demonstrates that the debate extends beyond China. Producer nations increasingly question the right of importing nations to impose information requirements far beyond their own borders.
The result is a growing dual-compliance trap for multinational companies.
International businesses may be required under U.S. or EU law to investigate supply chains, document human-rights risks, verify forced-labour exposure, and collect supplier information. At the same time, Chinese regulations may restrict or scrutinize the very information-gathering activities needed to comply with those requirements.
This creates a serious challenge for the business information industry. Business-information providers, ESG verification firms, supply-chain intelligence companies, KYC/KYB providers, and compliance specialists all depend on the ability to collect, verify, and transmit information across borders. If access to information becomes increasingly restricted, the foundations of modern compliance and risk management become more difficult to sustain.
We may now be entering an era of fragmented transparency
The United States, the European Union, and China all speak the language of security, resilience, sovereignty, and responsible supply chains. Yet all three are also creating rules that increasingly determine what information may be collected, where it may be stored, who may access it, and how it may be shared.
For decades, globalization was built on the assumption that information would flow more freely across borders. Today, the opposite trend appears to be emerging. Information is increasingly being treated as a strategic asset, subject to national control and geopolitical considerations.
The dilemma for international business is clear: companies are being asked to comply with multiple and sometimes conflicting regulatory systems while access to the information needed for compliance becomes increasingly restricted.
The larger question is whether globalization can continue to function efficiently when transparency itself becomes regionalized.
For the business information industry, this may become one of the defining strategic issues of the decade. Compliance cannot work if the information required to comply is no longer available.
Source: Freshfields, BIIA, Diverse Regulatory News, Intrepid Explorers, LLC Research supported by ChatGPT