Introduction
On July 1, 2026, in China,National Unity and Progress Promotion ActThe "National Unity and Progress Promotion Act" has been officially enacted. This new law is not merely a matter of domestic national policy, but could also become a new compliance risk factor for Japanese companies and Japanese businesses operating overseas.
With the government's intention to strengthen the "Chinese national community consciousness" as its backdrop, we have entered an era where companies must pay attention to everything from training content and personnel systems to even the wording on their websites. This article, based on the commentary of Professor Takahiro Kamiya of Kyoto University of Foreign Studies, clearly explains the actual aims of this new law, the specific risks faced by Japanese companies, and practical countermeasures for safely conducting business while avoiding excessive self-regulation.
The imposition of a "Chinese national community" consciousness: The true aim of the new law and its impact on businesses.
While this new law ostensibly aims to "ensure equality and prohibit discrimination among China's 56 ethnic groups," its true objective lies much deeper. It seeks to unify language, education, religion, and historical understanding, and to instill a sense of a "Chinese national community" in all citizens.
Of particular note is that this law stipulates that "state institutions and corporations" also bear the joint responsibility of promoting national unity. In other words, this is not just a matter for the government; private companies are now expected (or required) to play a certain role in realizing political visions.
Furthermore, the fact that the preamble explicitly includes policy terms that President Xi Jinping values, such as "Sinicization and modernization of Marxist national theory" and "Chinese-style modernization," suggests that this law is a top-level political priority for the country. In an environment where corporate activities and the formation of political consciousness are closely intertwined, the criteria for how Japanese companies should conduct themselves are changing.
Four Key Clauses and Practical Actions Japanese Companies Should Check Immediately
Professor Kamiya identifies the following four articles as crucial for business practices. Let's look at specific points to consider based on these.
- Article 45: Incorporation of "national unity" content into on-the-job training.
Companies must incorporate content that strengthens a sense of Chinese national community into their employee training programs. This does not mean that all employees are required to receive political education, but companies must be prepared to explain their policies in case of inquiries or audits from the authorities.
[Countermeasures]Conduct training on the prohibition of ethnic discrimination and ensure that you can quickly provide records (logs) of "when" and "to whom" the training was conducted. - Article 59: Prohibition of ethnic discrimination in employment and services
The regulations stipulate that organizations must not engage in discriminatory practices such as employment discrimination or refusal to provide goods or services on the basis of ethnicity.
[Countermeasures]Thoroughly review job postings, interview questions, performance evaluation and promotion criteria, and customer service manuals to ensure they do not contain any unfair discriminatory language based on ethnicity, religion, or region of origin. - Article 60: Obligation to immediately stop acts of division within the company
It is stipulated that if acts that undermine ethnic unity occur within an organization, they must be promptly suppressed (suppressed).
[Countermeasures]It is essential to establish procedures (SOPs) that enable HR and legal departments to respond quickly to issues related to ethnicity, religion, and region in internal chat, training, labor disputes, and customer service. - Article 63: Pursuing legal responsibility against foreign organizations and individuals
The document indicates that even organizations and individuals located outside of China will be held accountable under the law if they engage in actions that undermine the unity of the Chinese nation or cause national division.
[Countermeasures]Because there is a risk that instructions from overseas headquarters or affiliates, or the content of global campaigns, may be viewed as problematic by Chinese authorities, it is necessary to carefully consider the balance between global control and local flexibility.
Pitfalls of Taiwan/Hong Kong terminology: Displaying information on websites and documents side-by-side is dangerous.
Article 21 of the new law stipulates that the state should promote cross-strait exchanges (between mainland China and Taiwan) and enhance the sense of belonging to the Chinese nation among Taiwanese compatriots. As a result, Hong Kong, Macau, and Taiwan are all positioned as "outer periphery of the Chinese national community."
[Risks to be aware of]
Referring to Taiwan as an "independent nation" on a company's website or in its materials, or carelessly listing mainland China, Hong Kong, Macau, and Taiwan in parallel (associating them as equals) in a list of countries and regions, may be considered problematic as it goes against the spirit of this law.
Furthermore, Article 10 stipulates a firm opposition to interference by foreign powers and to acts of slander and defamation against China on the pretext of ethnicity, religion, or human rights. Combined with these points, expressions concerning Taiwan's status and national identity are in a very sensitive area.
[Note: Be careful of excessive self-regulation]
A key characteristic of China's security and integration legislation is the ambiguity of the scope of violations (the red line). Authorities exploit this ambiguity, hoping that companies will exercise a certain degree of "self-regulation."
However, if internal discussions and human rights due diligence are stifled, there is a risk of being unable to fulfill accountability to Western markets and investors. The important thing is not to stop the activities themselves, but to prepare "records and procedures that can be explained when inquired about by Chinese authorities." Narrowing the scope of management and focusing on practical responses is key to maintaining the soundness of a global company.
Summary
The implementation of China's new law, the "Law for Promoting National Unity and Progress," is not merely an update of domestic law, but an attempt to extend a grand vision of building national identity to corporate activities. While outwardly proclaiming equality and the prohibition of discrimination, its true purpose is the unification and strengthening of the consciousness of a "Chinese national community," and corporations are positioned as a part of this effort.
The challenge facing Japanese companies is not direct backlash against political messages, but rather surveillance by authorities that exploit ambiguities in compliance. Maintaining proper training records, eliminating discrimination in personnel systems, and exercising caution in the use of Taiwan and Hong Kong terminology are key to risk avoidance.
The key here is to avoid excessive self-censorship driven by fear. Abandoning internal discussions and considerations for human rights will lead to a loss of credibility in the global market. Rather, transparency and practical record-keeping that enable immediate responses to inquiries from authorities will be the shield that protects the company.
In today's world, where the boundaries between politics and economics are blurring, companies should pursue "explainability" rather than simply "compliance." The wisdom to decipher the authorities' intentions in exploiting the ambiguity of the red line, and to balance business continuity with global responsibility, is the true compliance awareness required for doing business in China going forward.
