China has introduced significant legal frameworks in 2026, including a revised Maritime Code effective May 1, 2026, and comprehensive Regulations on Industrial and Supply Chain Security, which took effect on March 31, 2026, according to a May 27, 2026 report by Metro Global. These legislative changes are poised to reshape international trade dynamics, particularly concerning the choice of Incoterms.
Industry experts, as cited by Metro Global, suggest that these new laws could strategically encourage Chinese exporters to transition from Free On Board (FOB) to Cost, Insurance, and Freight (CIF) Incoterms. This potential shift is seen as a move to allow Chinese entities to exert greater control over freight, insurance, and potential litigation, effectively bringing disputes onto their home turf. The revised Maritime Code, in particular, grants Chinese courts a more prominent role in contracts of carriage connected to Chinese ports, potentially overriding foreign laws, such as English law, in the event of a dispute.
Despite this strategic encouragement, Metro Global clarifies that Incoterms remain an international standard. Therefore, FOB remains fully available for trade, for instance, between China and the UK, especially when the buyer prefers to manage main-carriage contracts and freight costs. This nuanced approach indicates that while China aims to bolster its legal jurisdiction and control within its supply chains, the fundamental principles of Incoterms as a global trade standard are acknowledged. The implications for international buyers and sellers are substantial, necessitating a careful re-evaluation of Incoterm choices to navigate the evolving legal landscape and mitigate potential risks.
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