China Proposes Major Overhaul of E-Commerce Law

China’s State Administration for Market Regulation (SAMR) and the Ministry of Commerce jointly released a draft amendment to the country’s E-Commerce Law on July 4, 2026, marking the first major revision of the landmark legislation since it took effect in 2019. The 20-article draft, now open for public consultation until August 4, aims to modernize the regulatory framework for the world’s largest online retail market, which China has held for 13 consecutive years, according to Xinhua News.

Why the Law Needs Updating

The original E-Commerce Law, enacted in 2018 and effective from January 1, 2019, established the foundational legal framework for online commerce in China. However, the digital economy has evolved dramatically since then, with new business models including live-streaming commerce, short-video sales, social commerce, and AI-driven retail emerging at breakneck pace.

According to SAMR and Ministry of Commerce officials, as reported in a Xinhua Q&A session, “The E-Commerce Law, as an important foundational law in the platform economy, needs to have certain provisions revised and improved to meet the needs of economic and social development.” The officials emphasized that e-commerce platforms, as “key entities” in the platform economy, have strong social attributes that require updated legislative treatment.

Five Key Areas of Reform

The draft amendment addresses five critical areas designed to reshape China’s digital marketplace. First, it expands the legal scope beyond traditional platforms and in-platform merchants to explicitly include digital content creators, social media influencers, live-stream hosts, and intermediaries—closing regulatory blind spots that have emerged since 2019.

Second, the revision strengthens platform accountability by introducing a wider range of regulatory tools beyond fixed fines and business suspension. Platforms will bear greater responsibility for verifying seller credentials, preventing counterfeit goods, and maintaining fair competition. The draft calls for routine oversight of platform operating rules, traffic allocation systems, and data algorithms.

Third, it enhances regulatory coordination by introducing a “consistent oversight for both online and offline businesses” principle, addressing the cross-sector operations of large digital enterprises. This strengthens cross-department collaboration and central-local government coordination.

Fourth, the amendment targets e-commerce violations that have drawn strong public complaints, revising provisions to address prominent illegal behaviors. Officials stated the goal is to guide the platform economy from “traffic first” to “innovation-driven” and from “competing on price” to “competing on quality.”

Fifth, it deepens international cooperation by aligning domestic rules with international practices, encouraging industry self-regulation and orderly overseas expansion, and introducing countermeasure provisions to protect Chinese companies’ legitimate rights abroad, as TechGolly reported.

Connection to Broader Policy Goals

The revision aligns directly with China’s 15th Five-Year Plan (2026-2030), which calls for stronger oversight of platform companies’ data, algorithms, traffic, and operating rules. As Xinhua’s English service noted, promoting innovation and sound development in the platform economy is a key task outlined in the plan.

People’s Daily, cited by Guancha.cn, commented that “the amendment of the E-Commerce Law is by no means a constraint on innovation, but a safeguard for development,” expressing hope that the public consultation will better protect the legitimate rights and interests of all parties while encouraging e-commerce platform operators to enhance their compliance awareness and capacity.

Market Context and Implications

China’s digital economy has grown exponentially since the law’s original enactment. Cross-border e-commerce imports and exports now account for over 6% of China’s total goods trade, while major platforms maintained R&D intensity of over 8% in 2025. The platform economy involves millions of merchants, numerous gig workers, and over 900 million online consumers.

For platform companies including Alibaba, JD.com, Pinduoduo, and Douyin, the revision promises clearer compliance requirements and a more predictable regulatory environment, though potentially higher operational costs. For merchants and consumers, the expanded scope means stronger protections and defined legal obligations for new market participants.

What’s Next

The public comment period runs until August 4, 2026. SAMR and the Ministry of Commerce will refine the draft based on feedback before submitting it to the legislative process. The revision represents China’s shift from reactive, crisis-driven enforcement toward proactive, systematic regulation of the digital economy—a transition that will be closely watched by markets and policymakers worldwide.