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

China's Ministry of Commerce condemned a new US move to add three Chinese entities to a forced-labor entity list, warning it undermines bilateral trade stability. Here is what foreign founders should understand about the dispute and its implications for companies registered in China.

What Happened

On October 28 (US Eastern Time), the US Department of Homeland Security announced that it would add three additional Chinese entities to the entity list under the so-called Uyghur Forced Labor Prevention Act. China's Ministry of Commerce spokesperson responded to a reporter's question on the matter, and the ministry's News Office published the remarks on October 29, 2026.

The spokesperson said China has noted the development and rejected the allegations behind the listing.

China's Official Position

According to the spokesperson, forced labor does not exist in China. The statement said people of all ethnic groups in Xinjiang enjoy free and equal access to employment, and that their labor rights are effectively protected in accordance with the law.

The spokesperson described the US measures as having no factual basis, and accused Washington of continuing to manipulate human rights issues as a cover for unilateral protectionism and bullying. China expressed strong condemnation and firm opposition to the move.

Prior Listings and Retaliation

The response noted that the United States had already placed a large number of Chinese entities on the so-called Xinjiang-related entity list not long before this latest action. China said it lodged solemn representations with the US side and took firm countermeasures in response.

According to the spokesperson, the US side did not correct course and proceeded with new sanctions despite China's firm opposition, this time adding Chinese biopharmaceutical technology enterprises to a sanctions list.

Why the Ministry Says the Listings Matter

The spokesperson argued that the US listing practices run counter to the consensus reached by the heads of state of the two countries. The statement said the measures seriously undermine the stability of China-US economic and trade relations and are also contrary to the spirit of humanitarianism.

China called on the United States to immediately stop political manipulation and smear campaigns, and to stop the unreasonable suppression of Chinese enterprises. The spokesperson said China will take necessary measures to firmly safeguard its own interests.

What This Means for Foreign Founders With China Operations

For foreign founders who have registered a company in China or are planning to do so, this exchange is a reminder that geopolitical friction between China and the United States can affect the operating environment. The ministry's statement does not set out new rules for foreign-invested companies, but it signals that the dispute over entity listings remains active and that both sides are responding.

Founders should keep several practical points in mind:

• Monitor official announcements. The Ministry of Commerce publishes spokesperson statements and notices through its official channels. Checking these sources helps founders distinguish official policy from speculation.
• Understand that entity listings are separate from company registration. The US action targets specific Chinese entities. It does not change the procedures for registering and operating a foreign-invested enterprise in China, which are governed by Chinese domestic law and administered by Chinese authorities.
• Review supply-chain exposure. If your China-registered company sources from or partners with entities named on foreign lists, assess contractual and compliance implications with qualified advisers.
• Keep documentation. Maintain clear records of your company's ownership, operations and supply relationships in China, as these are routinely requested during registration, licensing and banking processes.
• Follow bilateral developments. Statements from the Ministry of Commerce indicate that China will respond to measures it considers harmful to its interests, so founders should track how the dispute evolves.

Key Takeaways From the Statement

• Three more Chinese entities were added to the US entity list under the Uyghur Forced Labor Prevention Act on October 28.
• China's Ministry of Commerce said forced labor does not exist in China and that Xinjiang residents' labor rights are protected by law.
• The spokesperson said the US measures lack a factual basis and serve unilateral protectionism.
• China said it had already made representations and taken countermeasures over earlier listings.
• The latest action also added Chinese biopharmaceutical technology enterprises to a sanctions list, according to the statement.
• China said the listings contradict the consensus between the two heads of state and damage the stability of China-US economic and trade relations.
• China demanded that the US stop political manipulation and unreasonable suppression of Chinese enterprises, and said it would take necessary measures to protect its interests.

Practical Guidance for Founders

Registration and Operations

Nothing in the statement changes the standard path for establishing a foreign-invested company in China, which typically involves name approval, business scope registration, capital arrangements and sector-specific licensing. Founders should continue to work with local authorities and professional advisers, and should factor in how international developments may affect banking, customs and partner due diligence.

Risk Management

Because the statement indicates that China will respond to US measures, founders should build flexibility into contracts and supply arrangements. Review force majeure, change-in-law and termination clauses with counsel, and keep open communication with Chinese partners about any exposure to listed entities.

Information Discipline

Rely on primary sources such as the Ministry of Commerce website for official positions. Avoid basing operational decisions on unverified reports, and consult legal and tax advisers on compliance questions specific to your business.

Foreign founders can contact ChinaMNC on WhatsApp or WeChat at +86 153 1898 8535 for help registering and operating a company in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.