Published by ChinaMNC · Honggu

US Adds Chinese Firms to Xinjiang-Linked Entity List: What Foreign Founders Operating in China Should Know

China's Ministry of Commerce responded sharply after the US Department of Homeland Security added three more Chinese entities to its Uyghur Forced Labor Prevention Act entity list on October 28. Here is what the official statement said and why it matters for foreign founders building businesses in China.

US Expands Entity List Under Xinjiang-Related Law

On October 28, US Eastern Time, the US Department of Homeland Security announced that it had added three additional Chinese entities to the entity list created under the so-called Uyghur Forced Labor Prevention Act. A reporter asked China's Ministry of Commerce (MOFCOM) spokesperson for comment, and the ministry's response was published on its official website on October 29, 2026.

For foreign founders who are registering a company in China or already running operations here, the exchange is a useful reminder that US-China trade tensions can affect specific Chinese companies and, by extension, the supply chains and partners connected to them. Understanding the official Chinese position helps founders anticipate how policy statements may shape the business environment.

What the MOFCOM Spokesperson Said

China rejects the forced labor premise

The spokesperson stated that forced labor does not exist in China. According to the response, people of all ethnic groups in Xinjiang enjoy freedom and equality in employment, and their labor rights are effectively protected in accordance with the law. The ministry described the US measures as having no factual basis.

Characterization of US measures

The spokesperson said the United States continues to manipulate human rights issues and uses the pretext of human rights to pursue unilateral protectionism and bullying practices. China expressed strong condemnation and firm opposition to the measures.

Reference to earlier listings and countermeasures

The response noted that the US had already added a large number of Chinese entities to the so-called Xinjiang-related entity list not long before this latest action. According to the spokesperson, China made solemn representations to the US and resolutely took countermeasures in response. The ministry said the US did not change course and continued to impose new sanctions despite China's firm opposition, including adding Chinese biopharmaceutical technology enterprises to the sanctions list.

Impact on bilateral economic and trade relations

The spokesperson said the US listing practice runs counter to the consensus reached by the heads of state of the two countries, seriously undermines the stability of China-US economic and trade relations, and goes against the spirit of humanitarianism. The ministry called on the US to immediately stop political manipulation and smear attacks and to stop the unreasonable suppression of Chinese enterprises. It added that China will take necessary measures to firmly safeguard its own interests.

Why This Matters for Foreign Founders in China

Official statements of this kind do not change company registration rules or the day-to-day compliance obligations of foreign-invested enterprises. However, they signal that certain sectors, particularly biopharmaceutical technology and any business connected to Xinjiang-related supply chains, may face heightened scrutiny in cross-border transactions.

• Supply chain due diligence: Founders sourcing materials or components from China should review whether any counterparty appears on US restricted lists, because such listings can affect export, financing, and banking relationships.
• Sector awareness: The statement specifically references biopharmaceutical technology enterprises. Founders in life sciences or health-related fields should monitor developments closely.
• Countermeasures: The spokesperson mentioned that China has taken and will take necessary measures. Foreign founders should watch for follow-up announcements that could affect licensing, data, or trade procedures.
• Local registration remains unchanged: Nothing in the statement alters the process for setting up a wholly foreign-owned enterprise, a joint venture, or a representative office in China. Registration continues to follow existing company law and foreign investment rules.

Practical Steps for Founders

Foreign founders operating in China can take a few sensible precautions in light of the statement:

• Keep records of your Chinese suppliers and partners and check them against published US and Chinese restriction lists periodically.
• Consult local counsel on export control and sanctions exposure if your business touches Xinjiang-linked goods or biopharmaceutical technology.
• Monitor MOFCOM announcements for any countermeasures that could affect your sector.
• Maintain open communication with your Chinese bank and local partners about compliance requirements.

These steps are general risk-management practices, not a response to any specific legal obligation created by the statement itself.

What the Statement Does Not Say

The MOFCOM response does not identify the three entities by name, does not detail the specific countermeasures China has taken, and does not set out any new rules for foreign-invested companies. Founders should avoid reading into the statement anything beyond what is published. For definitive guidance on sanctions or export controls, consult qualified legal counsel.

Bottom Line

The MOFCOM statement is a diplomatic and policy response to a US listing action. For foreign founders, it is a signal to stay informed about US-China trade measures and to keep supply chain compliance in good order while continuing to build their China operations under existing registration and investment rules.

Foreign founders who need help registering and operating a company in China can contact ChinaMNC on WhatsApp or WeChat at +86 153 1898 8535.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.