Beijing is moving to close a loophole that has allowed foreign firms to acquire sensitive Chinese technology by hiring away experienced engineers. Starting September 15, a new State Council regulation will give immigration and commerce authorities broader powers to question travelers, verify the purpose of their trips, and block departures of individuals deemed a risk to national industrial or technological security.
The 19-article regulation, announced on July 31, establishes a coordinated system to warn citizens about overseas risks and tighten controls on both Chinese nationals and foreigners. It does not name specific sectors, but analysts say it is aimed at industries where China already imposes export controls, including electric vehicle batteries, solar panels, and rare earths.
Preventive measures, not arrests
Under the new rules, immigration and visa officials can demand documents or data to verify identity and travel purpose. Invitation letter issuers will be held liable for the authenticity of their letters. Citizens who violate export control or technology trade regulations, or who may endanger national security, can be barred from leaving the country by commerce departments.
“There are many situations that could endanger national security and interests, and it is hard to spell out every one of them in legislation,” said Cheng Xiezhong, a legal scholar and professor at the China University of Political Science and Law. “The new regulation names one such situation, which is the violation of export control or technology trade management.”
Unauthorized exports of dual-use items or transferring key industrial technology abroad will fall under the provision of “causing harm to national security and interests” in Article 12 of the new exit-entry law, he added.
A Shandong-based columnist writing under the pen name “Xinghe Duke” noted that the phrase “may endanger” is central to the regulation. “It means the authorities won’t wait until harm is done, but they will take precautionary measures,” he said. “The wording of ‘Decided by the commerce authority and other departments’ means there is a lawful process. ‘Barred from leaving’ does not mean arrest; it just means the targeted person cannot leave the country.”
The regulation also requires authorities to remind citizens traveling to high-risk countries to exercise caution, and may discourage travel to destinations under the highest-level warning. Those who commit crimes abroad that harm national security face bans of six months to three years after returning. Agencies providing exit-entry intermediary services must register with local immigration authorities within 15 days of setup, with existing agencies given 90 days to comply.
Targeting talent outflows
The export control clause is widely seen as a response to the poaching of Chinese engineers by foreign companies. “In the past, foreign companies dodged China’s export controls by poaching Chinese engineers, offering them higher pay, green cards and equity to help build identical factories in Vietnam, India or Mexico,” said the columnist. “That path is now closed under the new regulation.”
Engineers with know-how in core technologies such as electrolyte formulas, N-type solar cell technology, and rare earth separation are the main targets. The United States and Japan have relied on Chinese talent to break purity bottlenecks in their rare earth separation projects in Australia and Texas.
China’s restrictions on critical minerals and separation technology were tightened against the United States in April 2025, when the Trump administration launched a trade war, and against Japan after Prime Minister Sanae Takaichi made pro-Taiwan remarks last November. As Washington, Tokyo, and Brussels build alternative supply chains in Australia, Brazil, and parts of Africa, they have increasingly turned to experienced Chinese engineers, prompting Beijing to crack down harder on talent and data outflows.
Chinese state media reported in June 2025 that many senior executives at state-owned rare earth producers had recently resigned, noting that industry veterans had become prime recruitment targets for foreign forces. Since then, authorities have piloted measures in some regions, including barring such personnel from working at similar overseas companies for three years after leaving their jobs, embedding digital watermarks in internal documents that trigger alerts if found overseas, and requiring key employees to report their children’s study-abroad plans to the Communist Party organization in advance.
On April 23, the Ministry of State Security disclosed details of a 2023 case in which a Chinese rare earth company manager surnamed Cheng was jailed for 11.5 years for leaking state secrets to a foreign nonferrous metals firm employee surnamed Ye. Cheng received about US$510,000 to cover overseas living costs for his wife and daughter.
Observers note that the new measures still have gaps. Authorities can only stop someone from leaving if a criminal investigation is underway, and retirees or resigned employees face no obligation to explain their travel plans unless they are employed by foreign firms. Those gaps may be what pushed Beijing to tighten its exit-entry rules further, as it seeks to protect its technological edge in critical industries.
