Key Points:
- Regulatory bodies released a 20-article draft amendment to broaden the scope of legal oversight across the digital economy.
- The proposed changes expand the regulatory framework beyond traditional online stores to cover live-stream hosts, influencers, and other digital actors.
- The draft introduces a unified regulatory framework to ensure consistent enforcement of both online and offline cross-sector business activities.
- New provisions aim to align domestic rules with global standards and introduce countermeasures to protect Chinese firms expanding overseas.
The regulatory landscape for China’s digital economy is undergoing a significant shift as government authorities propose a comprehensive update to the national e-commerce framework. The State Administration for Market Regulation, along with the Ministry of Commerce, recently released a 20-article draft amendment to the country’s landmark E-Commerce Law. Initially enacted in 2019, the current law is facing its first major revision to keep pace with the rapid development of new business models, including live-streaming, short-video sales, and cross-border trade. The proposed changes aim to broaden the scope of legal oversight, improve platform accountability, and strengthen regulatory coordination across different economic sectors.
The primary objective of the draft revision is to expand the legal boundaries of the existing e-commerce framework. While the original 2019 law focused heavily on traditional online marketplaces and individual third-party merchants, the new proposal encompasses a much wider array of participants in the modern digital economy. This includes digital content creators, social media influencers, live-stream hosts, and the various intermediaries that facilitate modern online transactions. By formalizing the rights and obligations of these new actors, the updated law seeks to eliminate regulatory blind spots that emerged during the breakneck pace of digital innovation over the last seven years.
To protect consumer interests, the amendment significantly improves the liability framework for digital platforms. It introduces a wider range of regulatory tools alongside existing penalties like fixed fines and business suspension orders. The draft calls for more robust and routine oversight of platform operating rules, traffic allocation systems, and data algorithms. Under the proposed guidelines, platforms will bear greater responsibility for verifying the credentials of sellers, preventing the distribution of counterfeit goods, and maintaining fair competition rules. These changes aim to steer the platform economy away from a purely price-driven, high-traffic model toward an innovation-focused system that prioritizes product and service quality.
Recognizing that many massive digital enterprises now span multiple industries, the draft amendment introduces a framework to streamline cross-sector operations. In the past, fragmented oversight across different government agencies often led to inconsistent enforcement. The new rules demand closer coordination between central and local regulatory authorities to ensure consistent supervision of both online and offline commercial activities. This synchronized regulatory approach will help prevent platform companies from exploiting loopholes by shifting their operations across different regional jurisdictions or mixing digital services with traditional physical commerce.
The push for stricter legal structures aligns with the massive scale of China’s domestic e-commerce sector, which has maintained its position as the world’s largest online retail market for 13 consecutive years. In 2025, major domestic e-commerce platforms maintained a research and development intensity of over 8%, while national revenue from cloud computing and big data services surged by 13.6%. The rapid expansion of these digital services has turned the platform economy into a critical driver of modern economic growth. Consequently, outdated laws from the late 2010s no longer provide an adequate legal foundation to govern a highly sophisticated, multi-trillion-dollar digital market.
Cross-border e-commerce has also emerged as a vital pillar of national trade, with imports and exports now accounting for over 6% of the country’s total goods trade. To support this global expansion, the draft amendment introduces specialized provisions aimed at deepening open cooperation. It proposes aligning domestic e-commerce standards, rules, and management frameworks more closely with international practices. Crucially, the proposal adds a set of defensive countermeasure provisions specifically designed to safeguard the legitimate rights and interests of Chinese enterprises participating in global e-commerce businesses and operating in foreign jurisdictions.
The updated legal framework also seeks to guide the international expansion of domestic platforms in an orderly and sustainable manner. The draft encourages industry associations to promote self-regulation, establish standardized codes of conduct, and assist companies in navigating foreign legal landscapes. By fostering high standards of compliance at home, the government aims to enhance the overall competitiveness of domestic platforms as they scale up their operations in Europe, North America, and Southeast Asia. These measures ensure that global growth does not come at the cost of domestic regulatory stability or international legal disputes.
The State Administration for Market Regulation and the Ministry of Commerce have opened a public consultation period for the draft amendment, which will run until August 4, 2026. During this one-month window, industry stakeholders, consumer advocacy groups, and legal experts can submit feedback to optimize the proposed rules. Regulators plan to analyze the public response and move the legislative process forward rapidly. Once finalized, the revised e-commerce law will provide a robust legal foundation to guide the platform economy through the end of the decade, balancing the need for commercial innovation with strict market order.
