For years, the foreign business community has called for greater transparency and opportunities to provide more input into China’s legislative and regulatory rule-making processes. In a small step forward, on July 19, the Legislative Affairs Office of the State Council (“SCLAO”) released draft revisions to the Regulations on Procedures for Formulating Administrative Regulations (“Draft Revisions”) that trend towards greater transparency. These regulations govern the drafting of “administrative regulations” that are promulgated by the State Council, and first went into effect in January 2002. This post summarizes key aspects of the proposed revisions.

Transparency & Public Comments

Since China joined the World Trade Organization, the State Council has often sought public comments when formulating administrative regulations. This practice however has never been codified. The Draft Revisions propose mandating at least one round of public comments in the rule-making process. Unless specifically excepted by the State Council, a ministry or ministries designated by the State Council to draft an administrative regulation would have to release a preliminary draft to the general public with at least a 30-day period for public comment.

A second round of public comments with at least a 30-day period is recommended, but not required, when a draft is ready for final approval. The promotion of public comment periods in these Draft Revisions are a welcome step towards greater transparency, even though in practice it may still be difficult for foreign industry associations and other affected parties to prepare well-considered comments in Chinese within such a tight time frame.

Relatedly, the Draft Revisions provide that the State Council’s annual legislative work plan should, after approval, be released to the public. This may create greater visibility and provide some advance warning for businesses and other parties who may be affected.

Input During Drafting

In many countries, third parties (including industry) play an important role in providing input to resource-strapped regulators. The Draft Revisions allow more opportunities for such engagement during the drafting process. They state that SCLAO may collect recommendations from the public for administrative regulations, including new proposals and suggestions for adjustments ―something that already happens to a limited extent on an ad hoc basis.

Under the proposed revisions, ministries designated by the State Council to draft administrative regulations may also invite relevant experts and organizations to participate in the drafting process, and may even entrust them with some degree of responsibility for drafting. Additionally, legal experts or organizations may be invited to weigh in on controversial points in drafts pending final approval. It remains to be seen whether foreign experts and organizations will be invited to participate during the drafting process more frequently than they have been in the past.

Post-Promulgation Assessments of Administrative Regulations

Finally, the Draft Revisions incorporate explicit language stating that SCLAO and ministries may organize post-promulgation assessments of regulations, and make adjustments as necessary. If a regulation is deemed unsuitable for economic and social development or for deepening reform efforts, or if it is found to be in conflict with superseding laws, recommendations may be submitted for it to be amended or canceled. While post-hoc reviews of regulations are not new, the inclusion of explicit language suggests a desire to emphasize or even systematize them. More systematic efforts to review regulations could create new openings for businesses to provide input to regulators on how they have been affected and seek modifications to ameliorate negative effects.

Public comments are due by August 20. Interested parties may submit comments to the State Council using the methods outlined in the announcement.

Zhijing Yu of Covington & Burling LLP contributed to the research and drafting of this article.

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Photo of Ashwin Kaja Ashwin Kaja

With over a decade of experience in China, Ashwin Kaja helps multinational companies, governments, and other clients understand and navigate the complex legal and policy landscape in the country. He plays a leading role in Covington’s China international trade and public policy practices…

With over a decade of experience in China, Ashwin Kaja helps multinational companies, governments, and other clients understand and navigate the complex legal and policy landscape in the country. He plays a leading role in Covington’s China international trade and public policy practices and, outside of Covington, serves as the General Counsel of the American Chamber of Commerce in China.

Ashwin helps clients solve acute problems that arise in the course of doing business in China and position themselves for longer-term success in the country’s rapidly evolving legal and policy environment. He is an expert on Chinese industrial policy and has worked on matters related to a wide range of sectors including technology, financial services, life sciences, and the social sector. Ashwin has also counseled a range of clients on data privacy and cybersecurity-related matters.

As the General Counsel of the American Chamber of Commerce in China (AmCham China), Ashwin serves as a senior officer of the organization and as an ex officio member of its Board of Governors, supporting nearly one thousand member companies in developing their businesses in China and advocating for their needs with China’s central and local governments.

Photo of Yan Luo Yan Luo

With over 10 years of experience in global technology regulations, Yan Luo specializes in the intersection of law and technology, focusing on regulatory compliance and risk mitigation for technology-driven business models. Her key strengths include data protection, cybersecurity, and international trade, with a

With over 10 years of experience in global technology regulations, Yan Luo specializes in the intersection of law and technology, focusing on regulatory compliance and risk mitigation for technology-driven business models. Her key strengths include data protection, cybersecurity, and international trade, with a particular emphasis on adapting to regulatory changes and ensuring compliance to support technology sector business strategies.

In recent years, Yan has guided leading multinational companies in sectors such as cloud computing, consumer brands, and financial services through the rapidly evolving cybersecurity and data privacy regulations in major Asian jurisdictions, including China. She has addressed challenges such as compliance with data localization mandates and regulatory audits. Yan’s work includes advising on high-stakes compliance issues like data localization and cross-border data transfers, navigating cybersecurity inspections for multinational companies, and providing data protection insights for strategic transactions. Additionally, Yan has counseled leading Chinese technology companies on global data governance and compliance challenges across major jurisdictions, including the EU and the US, focusing on specific regulations like GDPR and CCPA.

More recently, Yan has supported leading technology companies on geopolitical risk assessments, particularly concerning how geopolitical shifts impact sectors at the cutting edge, such as artificial intelligence and semiconductor technologies.

Yan was named as Global Data Review’s40 under 40” in 2018 and is frequently quoted by leading media outlets including the Wall Street Journal and the Financial Times.

Prior to joining the firm, Yan completed an internship with the Office of International Affairs of the U.S. Federal Trade Commission in Washington, DC. Her experiences in Brussels include representing major Chinese companies in trade, competition and public procurement matters before the European Commission and national authorities in EU Member States.

Photo of Timothy P. Stratford Timothy P. Stratford

Tim Stratford is senior counsel and a member of the firm’s International Trade, Corporate, and Public Policy Practice Groups. He is also serving as Chairman Emeritus of the American Chamber of Commerce in the People’s Republic of China. Tim’s practice is focused on…

Tim Stratford is senior counsel and a member of the firm’s International Trade, Corporate, and Public Policy Practice Groups. He is also serving as Chairman Emeritus of the American Chamber of Commerce in the People’s Republic of China. Tim’s practice is focused on advising international clients doing business in China and assisting Chinese companies seeking to expand their businesses globally. Except for the five years he spent in Washington, DC as Assistant U.S. Trade Representative (2005-2010), Tim lived and worked continuously in the greater China region from 1982-2023, including for twelve years as managing partner of the firm’s Beijing office.

As Assistant USTR, Tim was responsible for developing and implementing U.S. trade policy toward mainland China, Taiwan, Hong Kong, Macao and Mongolia. He worked closely with other senior U.S. and Chinese officials from numerous government departments and agencies to address problems encountered by companies engaged in bilateral trade and investment and co-chaired a number of important bilateral working groups and dialogues established under the U.S.-China Joint Commission on Commerce and Trade and the U.S.-China Strategic & Economic Dialogue.

Prior to serving at USTR, Tim was General Counsel for General Motors’ China operations, where he was a member of GM’s senior management team in China and oversaw the company’s legal and trade policy work. Tim also served previously as Minister-Counselor for Commercial Affairs at the U.S. Embassy in Beijing and as three times as Chairman of the American Chamber of Commerce in China. He is a graduate of Harvard Law School and Brigham Young University, and is fluent in Mandarin and Cantonese.