In 2026, China–Korea economic and trade cooperation has deepened across the board. In January, South Korean President Lee Jae-myung made his first visit to China after taking office. The two sides signed 15 cooperation documents covering technological innovation, industrial collaboration, intellectual property, transportation and ecological environment, and food safety. More than 200 Korean entrepreneurs formed an economic delegation to accompany the visit. Negotiations on the second phase of the China–Korea Free Trade Agreement have accelerated. In April 2026, the two sides completed the 14th round of negotiations, with in-depth consultations on cross-border trade in services, investment, and financial services. Visa facilitation has been implemented, and there are currently more than 600 scheduled flights per week between the two countries. In the first quarter of 2026, total China–Korea merchandise trade reached RMB 701.69 billion, up 32% year on year.

（Source: Canton Fair official website）

The Canton Fair is the first window for Korean businesses to share in China’s dividends. In each of the past five sessions, about 8,000 Korean buyers attended. Leading companies such as Samsung Electronics and Lock&Lock have participated for more than 30 consecutive sessions. The 139th Canton Fair was successfully held from April 15 to May 5, with more than 32,000 exhibitors, including 279 leading procurement companies such as Samsung Electronics. The 140th Canton Fair (Autumn) will open on October 15, 2026. This is an unmissable opportunity for Korean businesses. This article examines the core legal compliance issues for Korean buyers and sellers in China trade.

I. Overview of China–Korea Trade

In 2025, bilateral imports and exports between China and Korea totaled RMB 2.37 trillion, up 1.7% year on year. China’s exports to Korea reached RMB 1.03 trillion, while imports from Korea reached RMB 1.34 trillion. Korea has been China’s second-largest trading partner for two consecutive years, accounting for 5.2% of China’s total foreign trade. In the first 11 months of 2025, China–Korea trade in electromechanical products reached RMB 1.43 trillion, up 5.9%, accounting for 67% of bilateral trade.

On the import side from Korea: electronic components grew by 9.9%, computer parts and accessories by 7.4%, and pharmaceutical materials and drugs by 8.9%. On the export side to Korea: electronic components grew by 10%, auto parts by 8.9%, the “new three” products (electric vehicles, lithium batteries, and photovoltaic products) by 12.4%, and medical instruments and equipment by 1.1%.

（Source: Sina Finance）

II. Key Legal Considerations for Contracting at the Canton Fair

Contracting at trade fairs moves quickly, but the faster the pace, the more important it is to hold the bottom line. The following four compliance actions must be implemented when signing contracts on site:

First, verify the counterparty’s signing qualifications. Request a copy of the business license and check whether the business scope includes trade or production. If necessary, entrust a professional institution to obtain a credit report.

Second, clarify payment terms, quality standards, and acceptance deadlines. Specify the payment method and deadline to avoid breach of contract caused by cross-border payment issues. Clearly cite specific national or industry standards, and agree on an acceptance period to avoid disputes caused by delays.

Third, pay attention to dispute resolution clauses. The contract should specify the applicable law and the dispute resolution method.

Fourth, make good use of on-site legal services. The Canton Fair has a “Legal Consultation” booth on site, where duty lawyers can provide immediate and effective legal advice. Companies may also engage their own legal team with cross-border service capabilities to provide contract review, business negotiation support, and other assistance.

III. Legal Compliance for Korean Exports to China: Semiconductors and Medical Aesthetic Devices

Korea’s exports to China are dominated by semiconductors, while medical aesthetic devices are a high-growth category. The following sections examine the core legal risks in these two industries.

(1) Semiconductors: Five Major Compliance Risks for Exports to China

Semiconductors are Korea’s largest export category. In the first four months of 2026, exports to China reached USD 32.3 billion, accounting for 29.3% of the industry’s total exports. Korean companies exporting to China must focus on the following compliance risks:

1. Origin determination. When exporting semiconductors to China, Korean companies should accurately determine the origin based on the specific product, processing techniques, and trade arrangements, and provide supporting documents such as certificates of origin, commercial invoices, purchase orders, and production and processing records. Incorrect declaration may lead to supplementary taxes, penalties, or cargo detention.

2. Equipment import licensing. Before importing semiconductor manufacturing equipment and components, companies should accurately determine the HS code based on the specific product model, technical parameters, and use, and verify whether it involves compulsory product certification, import licenses, dual-use item controls, inspection and quarantine, or other regulatory requirements. For products with unclear regulatory conditions, a professional compliance review should be completed before import.

3. New customs declaration rules. Since May 1, 2025, GACC Order No. 277 has been in effect, comprehensively revising the time limits and document requirements for import and export declaration. Many local customs authorities have implemented special inspections for semiconductor companies importing spare parts.

4. Rare earth export controls. In February 2025, China imposed export controls on key items such as tungsten, molybdenum, and indium. Exports with end uses involving chips at 14 nanometers and below require case-by-case approval, directly affecting Korean semiconductor companies’ access to raw materials.

5. Anti-dumping risk. China’s Ministry of Commerce has continued to impose anti-dumping duties on solar-grade polysilicon originating in Korea (initial rates of 2.4%–48.7% in 2014, adjusted to 4.4%–113.8% in 2017). The semiconductor sector may face similar risks in the future.

（Korea Pavilion at the Canton Fair – Source: Wuhan Institute of Design and Sciences）

(2) Medical Aesthetic Devices: Meeting China’s Compliance Threshold

Although medical aesthetic devices are smaller in export volume than semiconductors, Korea’s technical strength in the medical aesthetics industry has already penetrated Chinese consumer awareness through the consumer market. According to the 2025 Insight Report on China’s Medical Aesthetics Industry released by the China Association of Plastic and Aesthetic Surgeons, the proportion of Chinese people traveling abroad for medical aesthetics increased continuously from 2023 to 2025, with Korea remaining the top destination. In 2024, Korea received 261,000 Chinese medical aesthetics customers, up 132.4% year on year, and the number further climbed to about 620,000 in 2025.

End-consumer demand will inevitably flow upstream to device trade. For Korean medical aesthetic device companies hoping to enter the Chinese market, registration with the National Medical Products Administration (NMPA) is an unavoidable core threshold. Imported Class II and Class III devices must complete registration, appoint a domestic agent in China, and the agency agreement must be notarized in Korea and authenticated by the Chinese embassy or consulate in Korea, with joint liability clearly specified. Technical documents must include a China–Korea standards comparison table, and instructions and labels must be in Chinese and indicate the registration certificate number. Korean clinical trial data usually need to be supplemented with clinical evaluation data for the Chinese population, and the specific sample size requirements depend on the product risk level and review requirements. In 2025, skin-piercing devices and consumables such as skin booster injections were included in Class III medical device management, and the requirements have been fully implemented. Products without registration approval are prohibited from being marketed and sold. Customs conducts inspections of imported medical devices in accordance with the law, and non-compliant products are not permitted to be imported. In March of the same year, NMPA Announcement No. 30 allowed imported registration holders to use original application materials for domestic registration, providing Korean companies with a new path for localized production. Compliance speed determines market opportunity.

IV. Compliance Risks in Other Key Industries

1. Cosmetics: Since May 1, 2025, a full version of the safety assessment system has been fully implemented for cosmetic registration and filing, and companies may no longer use simplified reports. The requirements for raw material toxicological data are extremely high, and a domestic responsible person must be designated to complete filing or registration.

2. Electronic components: Pay attention to intellectual property compliance. Exported products must not infringe Chinese patent rights. Make good use of RCEP and China–Korea FTA rules of origin to choose the most favorable tariff preferences. Under the RCEP framework, 86% of products between the two sides enjoy zero tariffs.

3. Auto parts: Some accessories require compatibility certification. Since the China–Korea FTA entered into force in 2015, ten rounds of tariff reductions have been completed, with auto parts and chemical products benefiting significantly. Certificates of origin should be applied for early.

（Semiconductor-related products – Source: Canton Fair official website）

V. Practical Guide to Cross-Border Dispute Resolution between China and Korea

(1) Typical Cases and Lessons

Case 1 (Equity): A shareholder capital contribution dispute involving a Korean health industry group. The parties established a cross-border cross-shareholding structure combining “capital + technology.” Due to differences in corporate governance philosophy, they reached a deadlock and litigated against each other domestically and overseas for more than ten years, with total claims of several hundred million yuan. The case was ultimately retried and mediated by the Supreme People’s Court. Lesson: Cross-border equity structures must be designed carefully, and evidence preparation must be systematic.

Case 2 (Insurance claim): A fire insurance claim involving a Korean construction company in China. After the 2013 fire at SK Hynix’s Wuxi plant, Chinese insurance companies paid USD 860 million in compensation and sought recovery from the construction contractor. The Supreme Court of Korea ultimately ordered the contractor’s parent company to pay KRW 12.9 billion (approximately RMB 66.82 million) plus overdue interest to five Chinese insurance companies. Lesson: Companies operating in China must carry adequate insurance and clarify claim clauses.

Case 3 (Mediation): A cross-border joint venture dispute involving Korea’s ID Health Industry Group. In 2016, it established a joint venture with a Chinese company to develop the medical aesthetics market. Disputes arose due to differences in business philosophy. After ten years of litigation and arbitration involving RMB 310 million, the case was heard and mediated by the International Commercial Court of the Supreme People’s Court in 2025. Lesson: Litigation and mediation and other diversified resolution mechanisms can save time and cost.

(2) Choice of Dispute Resolution: Arbitration Is Recommended

Regarding cross-border recognition and enforcement, arbitration has clear advantages. Both China and Korea are contracting states to the 1958 New York Convention, and arbitral awards can be directly applied for recognition and enforcement in the other country, with simpler procedures and shorter timeframes. CIETAC awards have already been successfully recognized and enforced by the Busan District Court in Korea. China and Korea have not signed a dedicated bilateral treaty on the mutual recognition and enforcement of court judgments. In addition, in 2025, China Arbitration Week was held in Seoul for the first time, and CIETAC and the Korean Commercial Arbitration Board (KCAB) reached a cooperation consensus to promote the alignment of arbitration services between the two countries, further strengthening the convenience of the arbitration path.

Conclusion

The Canton Fair is a strategic window for Korean businesses to enter China. Underlying the opportunities, legal compliance is the credit foundation for long-term cooperation. We wish Korean businesses steady and sustained progress and shared success at the 140th Canton Fair.

About the Author

Yu Yuting
Partner | NEO-ARK Law Firm

Lawyer Yu focuses on foreign-related litigation, cross-border disputes, commercial matters, and legal services for overseas individuals and businesses in China.

Email: [email protected]

On July 31, 2026, the National Radio and Television Administration (NRTA) officially issued Order No. 16, the Measures for the Administration of the Development of Micro-Short Dramas, which takes effect on September 1, 2026. This is China’s first departmental regulation dedicated specifically to micro-short dramas. The new rules set out requirements for classified management, filing and public announcement, distribution licensing, content review, broadcasting management, labeling of AI-generated content, and overseas broadcasting.

This article examines the key issues that AI short drama companies should focus on under the new regulation.

（Source: National Radio and Television Administration (NRTA)）

I. Three-Tier Classified Management: How Should AI Short Dramas Be Categorized?

The new regulation divides micro-short dramas into three categories based on investment amount and subject matter, applying differentiated regulation:

AI short drama companies must first clarify their content positioning. At present, most AI-generated short dramas have relatively low production costs, but this does not automatically mean they fall into Category III. Project classification still depends on a concrete assessment of investment amount, subject matter, and other factors. For Category II micro-short dramas, the new regulation also makes clear that provincial radio and TV authorities may formulate local implementation rules by reference to the filing and public announcement system for Category I micro-short dramas.

Legal Recommendations:
Prepare a list of existing and in-production projects, and classify them by investment amount, subject matter, production entity, production location, broadcasting platform, and domestic/overseas broadcasting. This will help identify the compliance path and time cost for each project. For AI short drama projects that plan to bring in foreign capital or involve co-production, it is especially important to clarify the regulatory classification at the project initiation stage, so as to avoid compliance issues that could affect cross-border capital flows or cooperation.

II. Special Rules for AI Short Dramas: Labeling Obligations, Content Red Lines, and Algorithm Governance

1. Labeling obligation: Article 34 of the new regulation expressly provides: “For micro-short dramas generated or produced using artificial intelligence technology, the production entity and the broadcasting entity shall comply with relevant national provisions and, in accordance with relevant rules, add a conspicuous notice label in each episode.”

2. Content red lines: Article 25 lists 11 prohibited categories. Micro-short dramas may not contain content that endangers national security or national unity, incites ethnic hatred, denigrates China’s excellent traditional culture, incites disruption of national religious policy, infringes on the lawful rights and interests or physical and mental health of minors, damages ecological and environmental protection, promotes obscenity, gambling, drug use, money worship, or extravagance, or depicts violence and terror.

3. Algorithm governance: “Addictive” features have also become a regulatory focus. Article 37 requires broadcasting entities to “regularly review, evaluate, and verify algorithm mechanisms,” give priority to recommending high-quality content, and refrain from using algorithm models that induce addiction or excessive consumption.

AI short dramas face “dual compliance” pressure: they must meet the general content standards for micro-short dramas and also satisfy the special disclosure requirements for AI-generated content. In practice, AI-generated historical figures and fictional plots can easily cross red lines such as “distorting history” or “desecrating heroes and martyrs.” Companies need to establish an AI content pre-review mechanism and cannot rely solely on technical review.

Legal Recommendations:

1. Embed an “AI-generated” watermark or label during the final production stage to ensure the label is conspicuous.
2. Establish a dual human + AI content review process, focusing on sensitive scenes involving history, ethnicity, religion, and minors.
3. Retain full-chain evidence, including AI training data sources, generation parameters, and human modification records, for regulatory inspection.

（Source: Online Audio-Visual Program Review System）

III. Heavier Platform Responsibility: Stricter Review by Broadcasting Entities and Higher Market Entry Thresholds

The new regulation imposes strict primary responsibility on broadcasting entities:

1. Before broadcasting Category I and Category II micro-short dramas, they must verify the Micro-Short Drama Distribution License or approval document.
2. For Category III micro-short dramas, the broadcasting entity must perform content management duties, conduct pre-broadcast review, and label the program number.
3. Establish an editor-in-chief content responsibility system and a full-process accountability and traceability mechanism for content safety.
4. Establish a credit evaluation system for key accounts that disseminate micro-short dramas and subject them to focused management.

Due to the special nature of AI content generation, AI short dramas may face stricter requirements in the future regarding copyright proof, AI labeling, licenses, material authorization, and manual re-review. This may lead to longer review cycles, more supplementary document requests, and an increased risk of temporary removal. This means that content compliance costs for AI short drama companies will rise significantly.

Legal Recommendations:

1. Communicate with major broadcasting platforms in advance to understand their internal review rules and special requirements for AI content.
2. Introduce compliance assessment at the project planning stage to avoid sunk costs caused by failed review after production is completed.
3. Consider voluntarily applying for Category I or Category II standards for some projects. Obtaining formal permission may actually give the project priority in platform recommendations.

IV. Intellectual Property and Data Compliance: Legal Risks in AI Short Drama Content

Article 10 of the new regulation clearly states that “intellectual property related to micro-short dramas is protected by law” and that “organizations and individuals engaged in micro-short drama activities shall enhance their awareness of intellectual property.”

AI short dramas face three major legal risks in this area:

1. Training data compliance: Have the film and television materials, scripts, novels, images, and music used in AI model training been authorized?
2. Ownership of generated content: Who owns the copyright in AI-generated scripts, characters, and images? For example, directly uploading screenshots of popular TV dramas, celebrity photos, or anime character images and asking AI to “generate by reference.” Even if the final result is not the original image, copyright and portrait rights risks cannot be excluded.
3. Infringement of personality rights: If AI-generated character images or voices resemble real natural persons, this may trigger infringement of portrait rights or voice rights.

Legal Recommendations:

1. Establish a mechanism for reviewing the lawful source of training data and retain evidence of the authorization chain.
2. Conduct a “significant difference” review of AI-generated content to avoid high similarity with real persons or existing IP.
3. Clearly agree with AI technology suppliers on the ownership of intellectual property in generated content and the allocation of liability for infringement.

V. Global Expansion Compliance: The “Dual Threshold” of Domestic Production and Overseas Broadcasting, and Global Layout

Article 8 of the new regulation states that China “supports the creation, production, and dissemination of export-oriented micro-short dramas, facilitates the participation of overseas principal creators in the creation of micro-short dramas, and supports the simultaneous domestic and overseas broadcasting of excellent micro-short dramas.” Article 52 provides that “micro-short dramas filmed within China for overseas broadcasting shall be subject to the relevant provisions of these Measures on filing and public announcement, review, and licensing.”

This legislative attitude of “supporting global expansion but requiring compliance first” deserves close attention. Although global expansion of AI short dramas is an industry hotspot, “domestic production and overseas broadcasting” still requires domestic filing and review procedures. Content that has not obtained domestic permission may face regulatory tracing even if it is broadcast only on overseas platforms.

A deeper issue is that different jurisdictions have vastly different regulatory frameworks for AI-generated content:

If companies produce content only according to domestic standards, they may face secondary compliance or even removal risks after going overseas. In particular, the “AI-generated labeling” required by the new domestic rules is converging in direction with the transparency obligations of the EU AI Act and the disclosure requirements of some U.S. states, but there may be differences in label placement, wording, and technical implementation. A direct translation of the domestic version may not satisfy overseas requirements.

Legal Recommendations:

1. Incorporate the AI content regulatory requirements of target markets into the script and production stages, rather than simply adding labels later.
2. After completing domestic compliance review and obtaining permission, make localized compliance adjustments for different markets, rather than releasing one version globally.
3. For companies planning to operate overseas businesses, it is necessary to simultaneously monitor the connection between the new domestic rules and overseas investment regulatory requirements.

（Source: CCTV.com）

Conclusion

The implementation of the Measures for the Administration of the Development of Micro-Short Dramas presents both difficulties and opportunities for AI short drama companies. The difficulties lie in rising compliance costs, stricter content review, and intensified algorithm governance; the extensive growth model will be difficult to sustain. The opportunities lie in the fact that compliant companies will obtain the “credit endorsement” of formal permission and gain a first-mover advantage in platform recommendations, capital connections, and global expansion.

For AI short drama companies intending to enter overseas markets, domestic compliance permission is not only a “passport” but may also become the credit foundation for negotiating with overseas platforms and obtaining copyright procurement or co-production opportunities. Only by front-loading compliance, actively adapting, and establishing a dual-track risk control system at home and abroad can AI short drama companies stand out in the industry’s development.

About the Author

Yu Yuting
Partner | NEO-ARK Law Firm

Lawyer Yu focuses on foreign-related litigation, cross-border disputes, commercial matters, and legal services for overseas individuals and businesses in China.

Email: [email protected]