The new Chinese legislation outlaws the import and export of rare animals and plants for commercial purposes. Exceptions will be made for scientific research, propagation, and cultural exchange.
The law comes into effect Friday and codifies an international agreement China signed in 1981. The Convention on International Trade in Endangered Species, known as CITES, prohibits the sale of endangered flora and fauna.
Environmental and animal activists hope China's new regulations will result in a crackdown on the trade in endangered species, including high-profile animals like the Tibetan antelope, or Shatoosh, killed for its fine wool.
Sun Shan of the Conservation International China Program says that in passing the legislation, the Chinese government has established clearer lines of responsibility.
"I hope it will have a big impact as illegal wildlife trade is still threatening wildlife both inside China and outside China. And by having this legislation I hope China will continue its regional leadership in combating illegal wildlife trade," said.
Some observers question the Chinese authorities' ability to implement the laws in a country where law enforcement is often hampered by lack of resources.
Under existing regulations, dating back to 1993, the trade in tiger bone and rhino horn is illegal. But there are several farms in China that breed tigers and animal conversation groups say they provide tiger parts for the traditional Chinese medicine trade.
Lisa Hua at the International Fund for Animal Welfare says these farms are only encouraging the trade in the endangered species and this contributes to the poaching of wild tigers.
"The government needs to take the lead to enforce the law and strengthen their law enforcement and management capacity to avoid poaching and illegal deals from happening. And on other side public need to be educated to be aware of the issue so they will know tiger not only solution for the illness they have," said Lisa Hua.
Ultimately, activists say, education is the key to stamping out the trade. So long as people believe tiger bones and other exotic animals or plants will give them a long and healthy life, they will continue to buy them.
Some studies put the number of tigers in the wild at fewer than 5,000.