China is weighing sweeping new restrictions on the overseas transfer of advanced artificial intelligence technologies and semiconductor designs while simultaneously recalibrating its refined fuel export policy, according to separate reports by the Financial Times and the South China Morning Post. Together, the developments point to Beijing’s increasing focus on safeguarding strategic assets in sectors viewed as central to national security and long-term economic competitiveness.
According to the Financial Times, Chinese regulators are considering tightening export controls covering AI technologies and semiconductor-related intellectual property as competition with the United States intensifies in frontier artificial intelligence. Officials led by the Ministry of Commerce (MofCom) have reportedly been consulting some of China’s leading AI developers and semiconductor companies on measures designed to prevent advanced domestic technologies and high-profile start-ups from being acquired or exploited by Western interests.
The discussions have involved companies including Alibaba, ByteDance and Zhipu, with regulators examining ways to restrict the overseas transfer of key datasets used to train AI models and to limit foreign users from downloading model weights, according to people familiar with the consultations cited by the Financial Times. Overseas customers would still be able to access Chinese AI models and related services, but the proposed measures would seek to reduce the transfer of core technological capabilities beyond China’s borders.
The consultations come as Chinese AI developers continue to narrow the performance gap with leading American companies. Last week, Moonshot released its Kimi K3 model, which, according to the report, outperformed Anthropic’s flagship Opus 4.8 across most benchmark tests. The release has been viewed as another indication of China’s rapid progress in advanced AI development.
Unlike many leading American AI systems developed by companies such as Anthropic and OpenAI, several prominent Chinese models, including those produced by Moonshot and DeepSeek, operate under an open-weight approach. This allows users to download the models onto their own servers and adapt them for specific applications, a feature that has contributed to their growing international appeal while also raising questions about the overseas transfer of advanced Chinese technology.
The Financial Times also reported that MofCom has sought industry feedback on possible restrictions that would prevent overseas semiconductor manufacturers, including Qualcomm and Taiwan Semiconductor Manufacturing Company (TSMC), from producing advanced chips based on processor designs created by Chinese firms such as Huawei, Alibaba and ByteDance. Regulators are also examining possible limits on foreign acquisitions of strategic Chinese technology companies, particularly those working in emerging areas such as agentic artificial intelligence.
The discussions reportedly seek to address concerns within Beijing over previous overseas acquisitions involving Chinese technology companies. According to people familiar with the matter, officials believe existing regulations contained loopholes that allowed Meta’s reported US$2 billion acquisition of Manus before Chinese authorities later ordered the transaction to be unwound. The proposals under consideration could become part of the next revision of China’s catalogue of technologies prohibited or restricted from export, one of the country’s three principal export control frameworks.
Industry consultations remain ongoing, and no final decisions have been announced. According to the Financial Times, technology companies participating in the discussions have warned regulators that stricter controls could slow domestic AI development and reduce China’s ability to compete internationally. The catalogue was last revised in 2025, when several lithium-ion battery manufacturing technologies were added to the list of restricted exports alongside existing controls covering strategically important sectors such as rare earth extraction and processing. If approved, the latest revisions would represent the most significant update to the framework in several years.
At the same time, separate reporting by the South China Morning Post indicates that Beijing has begun easing restrictions on refined fuel exports introduced earlier this year, while imposing new compliance requirements designed to preserve domestic energy reserves. According to three people familiar with the policy, refiners are now permitted to export fuel only within allocated quotas and must maintain inventory levels above those recorded at the end of February.
The restrictions on refined fuel exports were first introduced in March following the outbreak of the US-Israeli conflict involving Iran, although Beijing did not formally acknowledge the measures. According to the South China Morning Post, the latest export quotas covering petrol, diesel and jet fuel have been allocated primarily to state-owned refining companies.
One source familiar with the matter told the publication that Beijing adopted a more cautious position on fuel exports after the collapse of the temporary truce between Washington and Tehran, with domestic supply security remaining the government’s primary concern. While export restrictions have been partially relaxed this month amid elevated global oil prices and strong national reserves, authorities continue to require refiners to preserve substantial domestic inventories.
Details of the policy were also outlined by Fu Chengyu, former chairman of China National Offshore Oil Corporation and Sinopec, in an article published by Energy Intelligence. Fu wrote that from the second quarter of 2026 China’s National Development and Reform Commission and Ministry of Commerce strengthened oversight of refined fuel exports, introducing vessel-by-vessel approval procedures and stricter quota controls. He said the measures were intended to prevent domestic crude resources from flowing overseas while limiting the impact of higher global oil prices on China’s economy.
Official figures cited by the South China Morning Post show China exported 23.6 million tonnes of refined fuel during the first half of the year, representing a 13.2 per cent decline compared with the same period a year earlier. April recorded the sharpest annual reduction, with exports falling by almost 38 per cent, while shipments also remained subdued during May and June.
Analysts told the publication that months of restrained exports combined with steady refining activity had left domestic inventories elevated, giving regulators greater confidence that exports could resume without jeopardising domestic fuel supplies. However, market observers said exports are unlikely to recover immediately because refiners still require time to allocate cargoes and organise shipments, while inventory requirements remain in force.
The renewed conflict involving Iran has continued to influence global energy markets. Iranian state media reported that US missile strikes targeted areas near Abadan, one of Iran’s principal oil hubs, over the weekend, while Brent crude prices climbed above US$90 per barrel. Analysts cited by the South China Morning Post said the increase was being driven primarily by geopolitical risks rather than underlying market fundamentals, with expectations that uncertainty could continue in the near term.
Taken together, the reports by the Financial Times and the South China Morning Post illustrate how Beijing is simultaneously reviewing policies affecting two strategically important sectors. While one set of discussions focuses on protecting advanced technological capabilities amid intensifying global competition in artificial intelligence, the other reflects efforts to balance export opportunities with domestic energy security during a period of heightened geopolitical tension. In both cases, consultations remain under way, with regulators continuing to gather industry feedback before final decisions are made.
