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

China's Commerce Ministry condemned new US entity-list additions targeting Chinese firms under the Uyghur Forced Labor Prevention Act, warning of countermeasures. Here is what the development means for foreign founders operating or registering companies in China.

US Expands Entity List Under Xinjiang-Linked Law

On October 28 (US Eastern Time), the US Department of Homeland Security announced that three additional Chinese entities would be added to the entity list maintained under the Uyghur Forced Labor Prevention Act. China's Ministry of Commerce (MOFCOM) spokesperson responded to a reporter's question on the matter, and the official readout was published on October 29, 2026, by the ministry's news office.

For foreign founders building or running companies in China, the exchange is a reminder that geopolitical and regulatory friction between Beijing and Washington can reach into supply chains, sourcing decisions, and cross-border commercial planning. The following summarizes what the Chinese government said, without adding facts beyond the official statement.

What the MOFCOM Spokesperson Said

Denial of the Allegations

The spokesperson stated that forced labor does not exist in China, that ethnic groups in Xinjiang enjoy free and equal access to employment, and that labor rights are effectively protected under law. The spokesperson said the US measures have no factual basis and described them as part of a continued effort by Washington to use human rights issues as a pretext for unilateral protectionism and bullying. China, the spokesperson said, strongly condemns and firmly opposes the measures.

Prior Listings and Chinese Countermeasures

According to the statement, the US had already added a large number of Chinese entities to the entity list under the Xinjiang-related law not long before this latest action. The spokesperson said China had made solemn representations to the US and had taken firm countermeasures in response.

The New Additions and the Biomedical Sector

The spokesperson said the US did not change course and proceeded with new sanctions despite China's opposition, including adding Chinese biopharmaceutical technology enterprises to the sanctions list. The statement characterized the listing practice as departing from the consensus reached by the heads of state of the two countries, as seriously undermining the stability of China-US economic and trade relations, and as contrary to humanitarian principles.

China's Demand and Stated Position

The spokesperson called on the US to immediately stop political manipulation and smear campaigns and to stop the unreasonable suppression of Chinese companies. The statement concluded that China will take necessary measures to firmly safeguard its own interests.

Why This Matters for Foreign Founders

The statement does not introduce new rules for foreign-invested enterprises, nor does it announce specific new compliance obligations. It is a political and diplomatic response to a US action. Still, founders should read it as part of the broader operating environment in China, for several practical reasons.

• Supply-chain diligence is not optional. US measures targeting Chinese entities can affect sourcing, export destinations, and customer contracts. Foreign founders whose China-based operations sell into the US market should map exposure to entity-list restrictions and seek specialist trade-compliance advice.
• Sector sensitivity varies. The latest action specifically referenced biopharmaceutical technology enterprises. Founders in life sciences, advanced manufacturing, and other technology-adjacent sectors should monitor both US and Chinese regulatory announcements closely.
• Countermeasures can shift quickly. The spokesperson referenced prior Chinese countermeasures without detailing them. Companies should build flexibility into contracts and supplier agreements so they can respond to changes in either jurisdiction.
• Official statements signal policy tone. MOFCOM statements are a useful barometer of how Beijing frames US restrictions. Tracking them helps founders anticipate the direction of trade policy and the language Chinese authorities use in disputes.
• Local registration and operations remain governed by Chinese law. The statement does not alter the process of setting up a company in China, which continues to follow existing company law, foreign investment rules, and local registration requirements.

Practical Steps to Consider

Review Your Exposure

Founders should identify whether any supplier, customer, or partner appears on US or Chinese restriction lists, and document the review. Keep records of due diligence in case counterparties or banks request them.

Keep Contracts Flexible

Force majeure, change-in-law, and termination clauses can help manage disruption if listings or countermeasures affect a transaction. Legal counsel in both jurisdictions is advisable for cross-border arrangements.

Monitor Official Channels

MOFCOM and other Chinese government websites publish statements, notices, and policy updates. Regular monitoring helps founders distinguish political messaging from binding regulatory change.

Separate Politics from Compliance

The spokesperson's statement is political in nature. Founders should treat it as context, while relying on formal legal and regulatory texts for compliance decisions.

Outlook

The statement indicates that China rejects the US listings and reserves the right to respond. For foreign founders, the takeaway is not a new registration requirement but a reminder that China-US trade tensions can affect real commercial decisions. Building compliance awareness and staying informed about official announcements are sensible parts of operating a company in China.

Foreign founders who need support with company registration, ongoing compliance, or understanding the regulatory environment 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.