ESG Gazette, China- May 2026

Summary

• The Provisions of the State Council on Industrial Chain and Supply Chain Security was issued by the State Council, aiming to prevent security risks, strengthen supply chain resilience, and safeguard national economic security.
• The Regulation on Countering Unjustified Foreign Extraterritorial Jurisdiction of the People's Republic of China was issued by the State Council, aiming to strengthen the fight against sanctions, interference, and "long-arm jurisdiction", improve the institutional measures for responding to improper extraterritorial jurisdiction by foreign countries, and enhance legal safeguards.
• For the purposes of protecting the ecological environment, preventing and controlling pollution and other public hazards, safeguarding public health and ecological and environmental rights and interests, maintaining ecological security, promoting green and low-carbon development, building ecological civilization, comprehensively advancing the construction of a Beautiful China, accelerating the modernization of harmonious coexistence between humanity and nature, and achieving the sustainable development of the Chinese nation, the Fourth Session of the 14^th National People's Congress has adopted the Ecological and Environmental Code of the People's Republic of China.
• The Technical Specification of Work Safety in Confined Spaces intended to curb the high incidence of accidents in confined spaces and unify control through mandatory standards.
• The Determination of Lost Workdays for Work Safety Accidents Injury aim to provide a unified and mandatory technical basis for determining the loss of working days and quickly defining minor/serious injuries in the investigation of production safety accidents, and to enhance the standardization and scientificity of accident investigations.
• Five Ministries or Departments jointly issued the Interim Provisions on Basic Rights and Interests Protection for Over-Aged Workers, it’s the first specialized regulation in China to clearly define the rights and interest of over-aged workers.

Contents

Comprehensive

• < Provisions of the State Council on Industrial Chain and Supply Chain Security >
• < Regulation on Countering Unjustified Foreign Extraterritorial Jurisdiction of the People's Republic of China >

Environment

• < Ecological and Environmental Code of the People's Republic of China >

Health and Safety

• < Technical Specification of Work Safety in Confined Spaces > 
• < Determination of Lost Workdays for Work Safety Accidents Injury >

Labour

• < Interim Provisions on Basic Rights and Interest Protection for Over-Aged Workers >

Summary of Law Updates:

Comprehensive

1. < Provisions of the State Council on Industrial Chain and Supply Chain Security > (2026-03-31)

The Provisions of the State Council on Industrial Chain and Supply Chain Security (hereinafter referred to as the Provisions) was approved by the 81^st executive meeting of the State Council and officially came into effect on 31^st March 2026. The Provisions provide a clear institutional basis for corporate supply chain compliance management.

The Provisions establish a national mechanism for industrial chain and supply chain security, to be jointly advanced by the Ministries of Foreign Affairs, Development and Reform, Industry and Information Technology, Public Security, State Security, Finance, Transport, Commerce, Customs, and the Cyberspace Administration, among others, in accordance with their respective responsibilities. The state implements a dynamic list-based management system for key areas, maintaining stability in the production and circulation of raw materials, technologies, equipment, and products in these areas. The Provisions promote information sharing in key areas, strengthen information platform support, guide inter-enterprise information connectivity, and adopt effective measures to safeguard data security.

The Provisions require that enterprises, industry associations, and chambers of commerce may report circumstances affecting industrial chain and supply chain security to relevant departments of people's governments at or above the county level. The state organizes physical and capacity reserves in key areas and encourages social capital investment in scientific and technological research and core technology development in these areas. Enterprises and research institutions shall improve their risk prevention and control systems to ensure the security and controllability of core technologies and related information systems and data.

The Provisions further stipulate that organizations and individuals within China must implement national countermeasures. Violators may be prohibited or restricted from engaging in government procurement, bid invitation and bidding, and relevant goods, technology imports and exports, or international trade in services, and may be prohibited or restricted from receiving data or personal information from abroad or providing such data or personal information to overseas, as well as exiting from China or staying or residing within China.

2. < Regulation on Countering Unjustified Foreign Extraterritorial Jurisdiction of the People's Republic of China > (2026-04-07)

To safeguard national sovereignty, security, and development interests, protect the lawful rights and interests of Chinese citizens and organizations, and uphold the international order based on international law, the Regulation on Countering Unjustified Foreign Extraterritorial Jurisdiction of the People's Republic of China (hereinafter referred to as the Regulation) was adopted at the 82^nd Executive Meeting of the State Council on 27^th March 2026, and came into effect on 7^th April 2026.

The Regulation explicitly stipulates that no organization or individual shall implement or assist in implementing unjustified foreign extraterritorial jurisdiction measures. Violators will face countermeasures including asset freezes, transaction restrictions, and fines. Notably, the Regulation further clarifies the dual tools of the "Malicious Entity List" and "Non-Enforcement Orders," incorporating data and personal information protection into the scope of countermeasures. Enterprises that provide data to or engage in transactional cooperation with listed entities will directly breach legal requirements.

For supply chain management, the Regulation requires enterprises to establish more robust risk identification and blocking mechanisms in cross-border data flows and key cooperation areas. Meanwhile, the Regulation provides an exemption application channel, allowing enterprises to implement foreign measures to a limited extent upon approval in exceptional circumstances, offering an institutional outlet for compliance dilemmas.

In addition, the Regulation explicitly requires industry associations to guide their members in operating in accordance with the law, meaning the role of industry self-regulation in sustainable business operations will be further strengthened. For foreign-invested enterprises in China and Chinese enterprises expanding overseas, revisiting cross-border data flows, supply chain due diligence, and sanctions compliance systems is no longer an elective course, instead it is a compulsory one.

 

Environment

1. < Ecological and Environmental Code of the People's Republic of China > (2026-08-15)

The Ecological and Environmental Code of the People's Republic of China (hereinafter referred to as the Code), was adopted by the Fourth Session of the 14^th National People's Congress on 12^th March 2026, and will come into force on 15^th August 2026.

1) The Code consolidates over 30 existing environmental laws, more than 100 administrative regulations, and numerous other legal documents into a single, systematic code, addressing gaps in legislation related to climate change, carbon neutrality, and the green transition. It contains 1,242 articles across five chapters, covering pollution control, ecological protection, and green and low-carbon development.

2) Key Features of the Code

• Comprehensive Environmental Protection: The Code integrates legislation on air, water, and land, targeting both traditional pollutants and emerging threats such as persistent organic pollutants (PFAS) and light pollution. It also addresses farm fires and human-wildlife conflicts, providing a holistic approach to ecosystem management.
• Green and Low-Carbon Development: For the first time, China has dedicated a standalone section to green and low-carbon development, translating commitments to carbon peaking and carbon neutrality into binding law. This section guides economic activities toward sustainability and supports the country’s climate-resilient goals.
• People-Centered Approach: The Code emphasizes public well-being and participation, institutionalizing the concept of ecological civilization and ensuring that environmental governance aligns with societal needs.
• Systematic Governance: By consolidating fragmented laws, the Code resolves conflicts, eliminates redundancies, and establishes unified principles and institutions for environmental management. It creates a standardized legal framework to support enforcement and coordination among government agencies.

3) The Code represents a landmark in China’s environmental legislation, providing a legal cornerstone for modernization with human-nature harmony. It strengthens the rule of law in ecological governance, promotes sustainable development, and positions China as a proactive leader in global environmental governance, trade, and green finance. It also serves as a model for other nations seeking systematic approaches to ecological protection and climate action.

 

Health and Safety

1. < Technical Specification of Work Safety in Confined Spaces > (2026-05-01)

The Technical Specification of Work Safety in Confined Spaces (hereinafter referred to as the Specification) was jointly issued by the State Administration for Market Regulation and the National Standards Administration on 31^st October 2025. It came into effect on 1^st May 2026. The main contents of the Specification are as follows:

1) The Specification stipulates the technical requirements for risk assessment, job approval, safety briefing, enclosed work areas and safety warnings, equipment and facility safety inspection, isolation, removal and purging, opening natural ventilation of entrances and exits, initial gas detection, work environment determination, mechanical ventilation, re gas detection and environmental determination, and individual protection before working in confined spaces.

2) The Specification stipulates the technical requirements for confirming entry, ensuring safety, and monitoring safety during confined space operations.

3) The Specification stipulates the technical requirements for the acceptance and evacuation of confined space operations after work.

2. < Determination of Lost Workdays for Work Safety Accidents Injury > (2027-01-01)

The Determination of lost workdays for work safety accidents injury (hereinafter referred to as the Determination) was jointly issued by the State Administration for Market Regulation and the National Standards Administration on 31^st December 2025, replacing the Standard for Lost Workdays Due to Accident Injuries (GB/T 15499-1995). It will be come into effect on 1^st January 2027. The main revisions to the Determination are as follows:

1) The Determination has added three new terms: injured personnel, injury diagnosis results, and injury location, clarifying the applicable subject of the standards and the source of the judgment basis; Optimize the terminology definitions for cumulative damage, coexisting damage, injury, and lost workdays, unify conceptual expressions, and eliminate ambiguity.

2) The Determination has added specific judgment criteria. When the clear criteria are insufficient, an expert group can be formed to refer to similar provisions for judgment; Clearly assess only the direct human injury caused by the accident, without considering the post medical recovery symptoms.

3) The Determination improves the calculation methods for cumulative and coexisting injuries and limits the number of lost working days for deceased individuals and the maximum number of lost working days for injuries.

4) The Determination clearly defines the criteria: if the number of lost working days is less than 105 days, it is judged as minor injury, and if it is 105 days or more, it is judged as serious injury; Two new emergency situations have been added that can be directly classified as serious injuries, namely, if a second level or higher medical institution issues a serious injury judgment result and the injured person enters the intensive care unit (ICU) for care, and cannot provide a clear diagnosis of the injury in a timely manner.

 

Labour

1. < Interim Provisions on Basic Rights and Interest Protection for Over-Aged Workers > (2026-07-01)

On 10^th May 2026, the Ministry of Human Resources and Social Security, together with four other national departments, issued the Interim Provisions on Basic Rights and Interest Protection for Over-Aged Workers (hereinafter referred to as the Interim Provisions), it will be effective on 1^st July 2026. This is China's first dedicated regulation specifically clarifying the rights and interest of over-aged workers, providing a clear institutional basis for their rights and interest protection.

The Interim Provisions require employers to ensure over-aged workers' basic rights and interest, including remuneration, rest and leave, occupational safety and health, and work injury protection etc. Remuneration shall not be less than the local minimum wage standard, shall be paid in full on a monthly basis in monetary form, and must not be withheld or delayed. Working hours shall comply with legal requirements, and overtime is generally not arranged. Employers shall assign suitable positions and work intensity based on the physical condition of over-aged workers, shall not assign work that endangers their physical or mental health or hazardous operations, and shall conduct safety production and occupational health education and training. Regarding work injury insurance, employers shall enroll over-aged workers in work injury insurance and pay the premiums; individuals do not need to pay. Retirement and medical insurance are also provided with a transition mechanism. Those who have not yet received retirement benefits may continue paying individually or negotiate with their employer for insurance participation.

The Interim Provisions require employers to enter into a written employment agreement with over-aged workers, specifying work content, remuneration, social insurance, and labor protection. Disputes may be resolved through three channels: labor dispute mediation and arbitration, filing a lawsuit with the court, or lodging a complaint with the human resources and social security department. Trade unions shall supervise employers' compliance with rights and interests’ protection obligations in accordance with the law.

Workers during the flexible delayed retirement period remain subject to the Labor Contract Law and other relevant laws and regulations.

  

Drafted by:
Henry Wang
Feeling Pan
Darrel Chen

Translation Reviewed by:
Kiwi Fu

Approved by:
Paul Shi