China's draft export curbs would sell AI access abroad but keep the models at home

Foreign companies could keep using Chinese AI through websites, apps and cloud platforms. They would need government approval to obtain model weights, training data or the expertise to run systems independently. Chinese AI labs do not yet know whether they can train or run advanced models on overseas servers. Countries trying to build solar manufacturing outside China may find it harder to import the process knowledge and equipment they need. The draft does not name the rankings that would count.

For foreign buyers, access would survive. Ownership would not. For Chinese labs, the open question is where they can run their own models. The final catalogue remains unknown.

What the draft does

China's Ministry of Commerce and Ministry of Science and Technology released the draft on 16 October as a revision to the Catalogue of Technologies Prohibited and Restricted from Export. It adds 40 technologies across three sectors: 23 in artificial intelligence, 12 in photovoltaics and 5 in biomedicine. Fourteen would be banned outright, and the other 26 would need a licence before they leave the country. On the AI side the list includes advanced models, agents that carry out tasks with limited human direction, and technology used to design chips and run large computing facilities. The AI entries single out large-model weights and training optimisation.

Model weights are the learned numerical values that make an AI system work.

Coverage is decided by thresholds, not by a list of named companies. A model falls inside the draft if it was trained with at least 10 to the power of 26 calculations of compute. A second threshold is 2 trillion parameters. A third test would catch models ranked in the world's top 10 on certain assessments of performance, use or efficiency, but the draft does not say which rankings count. Liu Jing, a senior partner at Beijing Dacheng Law Offices who took part in consultations with policymakers, told Reuters that companies wanted more clarity on those tests. Public comments run until 15 November 2026, and an interim registration requirement took effect on the day the draft was announced.

Access sold abroad, ownership kept at home

Foreign customers would still be able to use Chinese AI through websites, apps and cloud platforms without triggering export controls. Under the draft, a developer in another country calling a Chinese model through an API, or a business subscribing to a cloud-hosted product, would not trigger controls. Buying the technology is a different matter. Transfers of model weights, training data or the expertise needed to run a system independently would need government approval. The draft extends that to changes of ownership or control and to deployments overseas.

Alfredo Montufar-Helu, Beijing-based managing director at consultancy Ankura, described the structure Beijing prefers: IP and R&D kept onshore, operations and access sold abroad. He said the market was already converging on it.

For Chinese labs, the open question is where they can run their own models. Researchers at major Chinese AI labs are seeking clarification on whether they can train or run their most advanced systems on foreign-owned overseas servers. The person briefed on the matter spoke to Reuters on condition of anonymity because the discussions were not public. In a worst case, developers might have to keep separate domestic and overseas versions of the same downloadable model, that person said. The Manus affair showed the gap Beijing wants to close. Meta acquired the Chinese-founded AI agent app without tripping existing export controls, and Chinese authorities later blocked the deal.

The overseas compute loophole

DeepSeek, Moonshot and Z.AI already sell access to their models to overseas customers through websites or cloud platforms. Some Chinese developers have gone further and rented computing abroad, where they can reach advanced chips that US export restrictions keep out of China. Nvidia's most advanced processors cannot be shipped to China under those rules. Whether that route survives the final rules is unclear. The draft's ranking test could also cover smaller systems that excel at specialised tasks, which is one reason firms want the criteria spelled out. Chinese law firm Han Kun, in an analysis, also questioned how regulators would apply the tests.

Solar and the China+1 calculation

The same draft covers 12 photovoltaic technologies.

China's weight in that supply chain is the point. Rediff reported that China controls more than 75% of the global solar supply chain, while Irrawaddy put China's share of global solar-panel component production above 80%. In April, Chinese officials were already weighing restrictions on exports of advanced solar manufacturing equipment to the US. The trigger was a report that Tesla sought about US$2.9 billion of equipment from Chinese suppliers. Beijing's concern was not only that the technology might reach a strategic rival. A successful American build-out would also create a competitor while Chinese producers were already struggling with overcapacity.

For countries trying to build their own capacity, the risk is less about panels than about process knowledge. India Ratings & Research said the proposal could slow capacity addition for backward integration and affect ALMM-2 timelines. Bhanu Patni, a director at Ind-Ra, said companies with secured supplies are less likely to be hit than those planning to enter the capex cycle now. Hanish Gupta, managing director of Sunkind India, said the country must treat China's proposal as a wake-up call. The move highlights India's technology dependence on China, the report said.

What happens next

China is expected to adopt the proposals by the end of the year and issue implementation guidelines later.

The source familiar with the matter requested anonymity because the timetable was not public. A MOFCOM spokesperson said projects and services compatible with open-source initiatives might qualify for automatic licensing. The draft is not the only measure moving. On 19 October, MOFCOM and the General Administration of Customs put certain tunnel boring machines, dredgers and specialised excavators designed for use above 3,000 metres under export control. The altitude threshold points to Himalayan infrastructure, where India is building along the Line of Actual Control, though the measure does not name India.

What the final catalogue covers is still unknown, including which rankings count and whether open-source projects get automatic licences.