From Wednesday, Beijing is strengthening its control of foreign investments with the entry into force of regulations supposed to guarantee “national security” in sectors considered sensitive, against a backdrop of technological rivalry with the United States.
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The new rules, initially unveiled on June 1, provide authorities with a broad legal framework to guide and control the flow of capital and qualified personnel from China to the international.
Beijing considers areas such as artificial intelligence (AI), semiconductors and green technologies as economically and strategically crucial, and seeks to encourage their development in the country.
At the same time, the new measures aim to “improve the quality and level of outbound investments”, according to the provisions set out by the Chinese government.
These international investments must respect the “overall conception of national security”, while seeking to “balance national and international considerations”, the regulations indicate.
In practice, the new framework authorizes the government to carry out reviews of investments or transfers likely to have an impact on “national security”, while Beijing often views cross-border transactions with suspicion.
Its main economic planning body thus blocked an attempt in April by the American technology giant Meta, owner of Facebook, to buy the AI start-up Manus created by a company founded in China, even though this firm is now based in Singapore.
Under the new rules, restrictions on transactions outside China will no longer be limited to the transfer of goods and data, but will extend to the export of services, for example sending technical experts abroad or conducting training outside the country.
Enough to increase the concern of some investors, fearing that these rules will limit the ability of the abundant and sprawling Chinese technological ecosystem to access global markets.
An independent American entity, the US-China Economic and Security Review Commission, judged this week on social networks that this toughening by Beijing “reinforced a trend” that it “had been following for months”.
“As is often the case with Chinese laws related to national security, the authorities responsible for enforcement have immense leeway in determining what constitutes an offense, which increases the risks for foreign companies” established in China, this bipartisan commission warned in May.
