Australia’s economic security debate still focuses on the physical elements of supply chains: mines, ports, processing plants, shipping routes and stockpiles. Beijing has moved further. China increasingly treats knowledge about supply chains as a strategic asset and has begun building the legal tools to control who can collect, use and act on that knowledge.
Two new Chinese measures deserve Canberra’s attention. State Council Order 834, the Provisions on Industrial and Supply Chain Security, entered into force in April. Article 13 targets investigations and information collection relating to industrial and supply chains inside China when those activities breach Chinese laws, regulations or national provisions. State Council Order 835, the Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States, gives authorities the power to prohibit Chinese entities from complying with foreign legal measures that Beijing judges improper.
Together, they create a strategic dilemma. The United States, Europe and Australia increasingly demand supply-chain transparency, while China increasingly treats it as a national security issue.
Article 13 of Order 834 doesn’t impose a blanket prohibition on supply-chain data collection, instead targeting unlawful investigations and information-gathering conducted within China. Yet the practical effect could prove much broader.
This is because Article 13 adds a new dimension to existing laws that allow authorities to classify commercial and industrial information as sensitive when national, economic or industrial security concerns arise. Previous laws focused largely on the information being collected, whereas Article 13 focuses on the purpose of the inquiry itself. A supplier audit, forced-labour assessment, critical-minerals traceability review, defence supply-chain screening exercise or China-plus-one diversification study can all reveal information about China’s industrial strengths, dependencies and vulnerabilities. Beijing can now ask not only what information is being collected, but why it is being collected and whose interests it ultimately serves.
Put simply, China has not banned transparency, but it has made transparency increasingly permission-based.
Order 835 extends that logic beyond China’s borders. In May, the Ministry of Justice and the Ministry of Commerce challenged the European Commission’s Foreign Subsidies Regulation investigation into Nuctech, a Chinese security-screening company. Beijing determined that elements of the investigation constituted improper extraterritorial jurisdiction and directed relevant Chinese entities not to cooperate. Reuters described this as the first enforcement of China’s new counter-extraterritoriality framework.
The significance extends far beyond Nuctech. Beijing didn’t merely object to a foreign regulatory investigation; it used domestic law to impede that investigation and warn companies against assisting it. This sets a precedent for a mechanism that China can apply across a much broader range of economic security disputes.
Australian firms now face a growing conflict-of-laws challenge. Companies operating across multiple jurisdictions increasingly confront overlapping compliance obligations. A business may need to simultaneously satisfy US forced-labour requirements; EU due-diligence regulations; Australian modern slavery expectations; defence-industry assurance requirements; export-control obligations; and economic, social and governance reporting standards.
Meeting those obligations often requires supply-chain mapping, ownership tracing, supplier declarations, site inspections and access to operational data. The same activity may now expose an Australian firm to legal liability in China. A company that collects information to satisfy Western compliance requirements may attract scrutiny under Chinese supply-chain security, data security, anti-espionage or secrecy laws. A company that refuses to comply with foreign sanctions, export controls or due diligence obligations may face penalties in the US, Europe or Australia. A company that complies with those foreign requirements may then face Chinese blocking measures, civil claims, administrative penalties or, in serious circumstances, potential criminal exposure under Chinese law.
Critical minerals sit at the centre of this challenge. Australia wants to reduce allied dependence on Chinese processing and build more resilient democratic supply chains. This requires detailed visibility into processing pathways, ownership structures, intermediate products, offtake arrangements and supply-chain dependencies. The information Canberra and its partners seek to understand increasingly overlaps with the information Beijing seeks to protect.
The defence industry faces a similar problem. Trusted supply-chain programs rely on evidence rather than assumptions. Governments and prime contractors need to identify foreign ownership risks, technology dependencies, coercion vulnerabilities and supply-chain chokepoints. Those inquiries become more difficult when the collection of supply-chain information itself becomes contested.
Mining companies, defence contractors, universities, audit firms, logistics providers, renewable-energy developers and major retailers with modern-slavery obligations all face versions of the same challenge. The issue extends well beyond China specialists and multinational corporations.
Canberra shouldn’t leave companies to navigate this environment through fragmented legal advice and vague risk warnings. Australia needs a practical economic security framework that helps firms identify high-risk activities, understand likely conflict-of-laws scenarios, and report coercion, obstruction or retaliation.
Supply-chain resilience begins with visibility. Governments cannot prioritise vulnerabilities they cannot identify, businesses cannot manage dependencies they cannot map, and allies cannot coordinate responses to risks they do not understand.
China has recognised this. Through Orders 834 and 835, Beijing intends to protect not only supply chains themselves but also information about how they operate. Australia and its partners should now recognise that the next phase of economic security will not focus solely on production, processing and trade. It will increasingly centre on who can access, collect and control the knowledge that underpins them.
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