China outlines system to subject foreign investors to national security review
- Rules cover everything from defence and technology to infrastructure, transport and financial services but officials insist they are not protectionist
- Foreign companies, joint ventures, takeovers and minority stakeholders could all be subject to review under the plans
China published details of a system to review foreign investments for national security risks on Saturday, covering everything from defence to agriculture.
The 23 articles published by the National Development and Reform Commission, the country’s economic planning agency, also cover investments near military facilities and foreign attempts to take over Chinese firms in key sectors.
The wide-ranging regulations include energy, equipment manufacturing, infrastructure, transport, information technology, internet products, financial services and technology.
“The rules on foreign investments are not protectionism, nor are they a regression in opening up,” the commission said in an explainer published on its website.
“Opening to the outside world without security guarantees is unsustainable. Only by tightening the fence to prevent and control security risks can we lay a solid foundation for a new round of opening up and better implement wider, broader, and deeper opening up.”
China is keen to attract more foreign investment, which has played a key role in the country’s economic boom. But it has also tried to tighten its regulations as Chinese investments came under greater scrutiny abroad.