China Legalizes eBLs: A Turning Point for Trade Finance

China is taking a decisive step toward the digitalization of global trade.

The revised Maritime Code of the People’s Republic of China, effective May 1, 2026, introduces explicit provisions for electronic transport records, aligning with the UNCITRAL Model Law on Electronic Transferable Records (MLETR). This reform provides long-awaited legal certainty for electronic bills of lading (eBLs), one of the most critical documents in international trade.

The new law formally recognizes electronic transport records as legally equivalent to paper documents, provided that they meet certain conditions. These include completeness and accuracy, accessibility for future reference, identification of the issuer, and the ability to verify the holder’s identity. (1) The law also allows parties to agree on the use of electronic records and permits conversion between electronic and paper formats. Most importantly, electronic records can now perform the functions of a document of title, including the transfer of rights. (2)

Why This Matters: China’s Scale

To understand the impact, consider the scale of China’s maritime ecosystem:

• China handles nearly 40% of global container throughput (3)
• 7 of the world’s top 10 container ports are in China (e.g., Shanghai, Ningbo-Zhoushan, Shenzhen)
• The Port of Shanghai alone handles 47+ million TEU annually (world’s largest)
• Over 90% of China’s foreign trade moves by sea

Any legal change in China’s shipping documentation system has global systemic impact.

Impact on Trade Finance

From a trade finance perspective, the implications are significant.

Electronic signatures were already used in eBL systems and legally recognized in China. However, they only ensured authenticity and integrity of documents—not their function as transferable documents of title. As a result, market participants relied on platform rulebooks to replicate transfer and control. The new Maritime Law closes this gap by providing statutory recognition to electronic transport records.

With the new law, electronic transport records that meet statutory requirements are explicitly granted the same legal effect as paper bills of lading. This reduces legal and operational risk for banks involved in issuing, confirming, and negotiating letters of credit, and increases their confidence in accepting eBLs.

The operational benefits are equally important. Electronic bills of lading can be transferred within minutes. This significantly shortens working capital cycles for both exporters and importers, reduces costs related to demurrage and storage, and enables faster access to financing, particularly for small and medium-sized enterprises.

The reform is also expected to accelerate the broader adoption of eBLs. China already has a strong ecosystem in place, including major carriers such as COSCO SHIPPING and digital platforms like GSBN and IQAX*. With clear statutory backing, transactions are likely to become standard practice. Interoperability between platforms is expected to improve, and new use cases such as tokenization and digital asset-based financing structures may emerge more rapidly.

In addition, the alignment with MLETR principles enhances cross-border compatibility. Electronic bills of lading issued in China are more likely to be recognized in jurisdictions that have adopted or are aligned with MLETR, such as the United Kingdom, Singapore, France and Germany. This reduces reliance on paper documents in these trade corridors.

Cost efficiency and sustainability are further advantages.

Remaining Challenges

Despite these advancements, some practical considerations remain.

• The interpretation of what constitutes a “reliable system” will be critical, particularly in legal disputes.
• Courts and regulators will need to provide further clarity on issues such as control, possession, and evidentiary standards.
• Market adoption will also depend on how quickly banks, corporates, and other stakeholders update their internal processes and align with the new framework.

It is also important to note that the reform is limited to maritime transport records and does not yet represent a full adoption of MLETR across all types of transferable documents.

Overall, this reform represents one of the most important developments in trade finance in recent years. By granting full legal recognition to electronic bills of lading, China removes a major barrier to digital trade and accelerates the transition away from paper-based processes. Given the country’s central role in global trade, this shift is likely to have far-reaching effects, making trade finance faster, more efficient, and more secure on a global scale.

*The technology provider behind the GSBN platform, in which COSCO SHIPPING is a founding member

Sources:

(1) (2) https://www.lawinfochina.com/display.aspx?EncodingName=big5&id=45908&lib=law&utm_source=chatgpt.com) article 84 and 86

(3) https://www.globaltimes.cn/page/202601/1354520.shtml

Reedsmith Law Firm, “China adopts major amendments to Maritime Law, effective 1 May 2026”,https://www.reedsmith.com/articles/china-adopts-major-amendments-to-maritime-law/

Anjie Broad Law Firm, “Stability and Change in the Relevant Norms of Contracts of Carriage of Goods by Sea under the New Maritime Code” By Bing Yan & Changyu Liu on January 16, 2026 https://www.chinalawvision.com/2026/01/shipping-offshore/stability-and-change-in-the-relevant-norms-of-contracts-of-carriage-of-goods-by-sea-under-the-new-maritime-code/