Executive Summary:
- The People’s Republic of China (PRC) enforces many product rules domestically without extending them to goods that leave the country. These cases span distinct ministerial jurisdictions, encompassing fentanyl precursors, flavored e-cigarettes, toxic children’s products, and large language models (LLMs).
- These trades share a similar factual structure. After judging a product as inherently harmful, unsafe above a specific threshold, or useful to the Party-state while detrimental to the public, the government regulates its domestic sale and applies the same rules in full to imports, yet leaves the export virtually unrestricted.
- The first three cases illustrate this regulatory asymmetry. Fentanyl precursors faced strict domestic controls, but kept reaching North America despite Beijing’s capacity to halt them. Flavored e-cigarettes, entirely banned internally, are exported en masse. Children’s goods that fail the PRC’s own safety standards are freely shipped to foreign consumers.
- LLMs present a variant of this structure. While non-PRC models lacking proper regulatory filing cannot lawfully serve PRC users, PRC open-weight models operate abroad without barrier, carrying the Party-state’s censorship and political narratives to global users.
On July 10, the China Securities Regulatory Commission (CSRC) cleared the mainland filing required for Shein’s Hong Kong listing, approving the issuance of up to around 340 million shares (CSRC, July 10). Beijing granted this clearance while the European Commission was investigating the platform for selling childlike sex dolls and other illegal products, and as the Seoul Metropolitan Government ordered the removal of children’s goods from Shein for violating chemical safety limits (European Commission, February 17; Seoul Metropolitan Government, June 30).
The Chinese regime operates an asymmetric model that seeks to prevent valuable resources from leaving its borders while courting the same resources to enter from abroad (China Brief, May 15, June 25, July 11, August 7). The other side of this asymmetry is what Beijing does with products it has already deemed problematic. Current regulations classify products such as fentanyl precursors, flavored e-cigarettes, children’s products containing harmful chemicals, and large language models (LLMs) as inherently harmful, unsafe above a threshold, or politically advantageous to the Party-state despite the public harm they may cause. These classifications underpin restrictions on the domestic sale or consumption of these products, but goods bound for export are not scrutinized in the same way, nor do they face the same rigid restrictions as do imports from overseas.
One consequence of this regulatory asymmetry is that the Party-state permits the seamless export of a number of goods that it actively restricts from its domestic market. These products then become another jurisdiction’s problem.
Control of Fentanyl Precursors Weaponized
The People’s Republic of China (PRC) enforces comprehensive domestic controls over fentanyl and its precursors. The State Council claims to have scheduled all such substances as early as April 2019, making it “the first country in the world to impose full control” on them (State Council Information Office, March 5, 2025). To close remaining regulatory gaps, six central government departments added 4-anilinopiperidine (4-AP), an early-stage fentanyl precursor; 1-boc-4-AP, its chemically protected form; and norfentanyl, an immediate fentanyl precursor, to the precursor-chemical regulations in August 2024 (Ministry of Emergency Management, August 8, 2024). In July 2025, regulations on the early-stage fentanyl precursor 4-piperidone and its protected derivative, 1-boc-4-piperidone went into effect (Ministry of Commerce [MOFCOM], June 20, 2025). By that point, Beijing had scheduled almost every internationally controlled fentanyl precursor within its borders (International Narcotics Control Board, accessed August 4).
Beijing’s tool for stopping the shipment of precursor chemicals overseas has existed for over 20 years. A 2005 administrative order allows five departments to require entities to apply for a license to export designated chemicals to designated countries. Myanmar and Laos were listed from the start, followed later by Afghanistan, and by 2024, 41 chemicals required licenses for export (Ministry of Justice, August 1, 2005; MOFCOM, April 23, 2024). The United States, Mexico, and Canada remained absent from the regime. Even as international controls tightened, precursors manufactured in the PRC continued flowing uninterrupted to Mexican laboratories supplying the American market (Drug Enforcement Administration, May 15, 2025).
Beijing likely weaponizes export controls as diplomatic leverage. Just 11 days after President Xi Jinping met President Donald Trump at the 2025 Busan summit, five departments finally added the United States, Mexico, and Canada to the list, restricting 13 chemicals from export (MOFCOM, November 10, 2025). A similar pattern emerged following the leaders’ recent meeting in Beijing. Within eight days of the summit, three new chemicals were added to the list (MOFCOM, May 22). The Chinese Party-state possesses decisive control over precursor supply chains and clear knowledge of their lethal end-use. Yet in recent years it has activated enforcement mechanisms only following instances of high-level diplomacy, during which it pursued transactional exchanges.
Flavored E-Cigarette Products Drift Abroad
Chinese regulators announced the “Administrative Measures for E-Cigarettes” (电子烟管理办法) in March 2022, which added certain restrictions on the sale of e-cigarettes domestically (State Tobacco Monopoly Administration, March 11, 2022). Along with a nationwide standard implemented later that year, it prohibited the sale of e-cigarettes to minors and near educational facilities, based on the Law on the Protection of Minors (未成年人保护法), among other restrictions (National Public Service Platform for Standards Information, April 8, 2022).
Beijing’s regulatory framework for exports appears equally strict. Article 33 of the same Measures provides guidance on e-cigarette products for export, noting that they must conform to the laws, regulations, and standards of destination countries and that PRC laws, regulations, and standards will prevail in instances where such countries have no relevant instruments of their own (State Tobacco Monopoly Administration, March 11, 2022). Regulators can also track the destination of exported devices. A 2023 guideline requires exporters to declare shipments truthfully to customs and to file documentation with the national platform within 30 days of that declaration (MOFCOM, July 18, 2023).
These requirements are not consistently applied, however, judging by available reporting. In 2024, millions of PRC-manufactured e-cigarettes entered the United States illegally. PRC customs officially recorded RMB 26 billion ($3.6 billion) in e-cigarette shipments to the United States. U.S. customs recorded only $333 million arriving, revealing a discrepancy of approximately ninety percent (Reuters, June 23, 2025). This violated U.S. Food and Drug Administration (FDA) controls on e-cigarettes that until May 2026 barred nearly all flavored devices (there are now 45 e-cigarettes that can be sold lawfully within the United States) (FDA, accessed August 5). As such, it also violated article 33 of the PRC measures, which explicitly requires exporters to comply with destination laws.
The PRC possesses all relevant documents and data necessary to halt such exports, including export declarations, customs records, and tax documents covered under article 33. The market regulator has real enforcement power. Despite evidence supporting faulty exports, however, no enforcement action against exporters appears to have been made public as of August 2026.
Children’s Product Standards Ignore Export Parcels
In 2024, a new domestic standard tightened preexisting restrictions on the presence of harmful chemicals in children’s footwear that had been in place since 2014 (National Public Service Platform for Standards Information, May 28, 2024). [1] The following year, six central government departments launched a three-year campaign on children’s product safety that made reducing excessive levels of phthalates in children’s footwear a priority issue. Regulators routinely sample inventory, impound noncompliant stock, and issue corrective orders (Xinhua, July 25, 2025).
Regulators enforce these standards on domestic sales, but goods sent to overseas buyers fall outside the scope of enforcement. A pair of children’s sandals cut in the same factory from identical materials faces almost no inspection once designated for export. The legal responsibility falls on the exporter, who faces limited accountability from regulators in foreign export markets, and limited oversight from domestic inspection apparatus. Imported children’s goods sold to PRC consumers, by contrast, fall under the same national standards as domestic products. Inspectors in South Korea recently found that five of 21 PRC-made items sold on the platforms Shein, AliExpress, and Temu failed safety standards, including children’s sandals containing phthalates at over 280 times the legal limit (Seoul News Communication, June 30). South Korea caps these chemicals at the same limit set by the PRC. Products like the sandals remain in circulation largely because PRC regulators ignore export parcels. Greenpeace Germany similarly found that 18 of 56 Shein garments tested, including children’s clothing, contained chemicals above the European Union’s legal limits (Greenpeace, November 20, 2025). Although the suspensions of duty-free treatment for low-value parcels have raised the cost of that channel, PRC goods from these platforms continue to flow into American and European households (Federal Register, August 5, 2025; Council of the European Union, December 12, 2025).
Large Language Models Show Another Side of the Asymmetry
The PRC’s exports of LLMs present a digital variant of this asymmetry. While LLMs are not physical goods, the Party-state is using the dissemination of Chinese LLMs as an opportunity to embed its social governance objectives in a virtual product. The 2023 “Interim Measures for the Administration of Generative Artificial Intelligence Services” (生成式人工智能服务管理暂行办法) bar output harming national unity or social order. The mandate requires providers serving the PRC public to register their models with the regulator (Cyberspace Administration of China, July 13, 2023). Foreign models like ChatGPT, Claude, and Gemini remain unregistered and blocked. Conversely, PRC developers build models like DeepSeek, Kimi, and Qwen to these internal specifications before deploying them globally, which produces measurably different behavior on political questions. [2]
For the Party-state, LLMs are critical in both internal stability maintenance (维稳) and external propaganda activities. Systems built to these specifications carry political biases in line with those of the Chinese Communist Party (CCP), compromising the information environment for any user relying on them. Unfiltered non-PRC models pose a direct threat to this information monopoly, prompting their categorical exclusion from the lives of PRC citizens. For instance, an audit of DeepSeek by researchers at the University of Southern California finds that the model’s internal chain of thought is systematically suppressed or rewritten before the censored answer is sent to the user. [3] By mandating the encoding of political guardrails into the underlying weights, the CCP seeks to ensure censorship prevails even when open-weight models are deployed abroad. At the same time, U.S. models that are not built to comply with the Party’s censorship requirements cannot operate within the PRC, creating an additional point of asymmetry between the two systems.
Conclusion
Beijing knows certain goods harm its people and builds strict domestic controls accordingly. Yet it continues to permit their export, whether through legitimate trade or by failing to restrict the illegal export of harmful goods. In 2009, before taking power, Xi Jinping publicly declared, “First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you” (中国一不输出革命，二不输出饥饿和贫困，三不去折腾你们) (CCTV, February 13, 2009). The preceding cases suggest that the PRC does “mess around” with its trade partners. While these cases span different bureaucracies and legal regimes, all four share a similar logic. For each product, the state demonstrates its regulatory capacity by enforcing restrictions within its domestic market—a level of control that it does not appear to extend to products bound for export.
Policymakers in destination countries face a trap. Import bans, product recalls, and entity lists merely mitigate the damage of individual products, but they have yet to meaningfully stem inbound flows of these products. This is because PRC policymakers have largely proven unwilling to enforce their own regulations on exporters. Until Beijing proves more willing to enforce its laws on PRC goods irrespective of their target destinations, it will continue to export harmful products to the rest of the world.
Notes
[1] The new standard caps phthalate plasticizers at 0.1 percent by mass, adds two more restricted chemicals, and tightens lead and hexavalent chromium limits.
[2] A comparative study using 145 political questions found PRC-developed models produced significantly higher refusal rates, shorter answers, and lower accuracy compared to foreign counterparts, with gaps narrowing on less sensitive prompts. This isolates intentional ideological design from general technological limits. See Jennifer Pan and Xu Xu, “Political Censorship in Large Language Models Originating from China,” PNAS Nexus 5, no. 2 (February 17, 2026), https://doi.org/10.1093/pnasnexus/pgag013.
[3] See Peiran Qiu, Siyi Zhou, and Emilio Ferrara, “Information Suppression in Large Language Models: Auditing, Quantifying, and Characterizing Censorship in DeepSeek,” Information Sciences 724 (January 2026): 122702, https://doi.org/10.1016/j.ins.2025.122702. The study compares the model’s chain of thought with its published answer and finds the reasoning suppressed or rewritten on sensitive topics rather than simply absent.
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