China Tightens Grip on Overseas Deals with New Regulations

China has introduced new rules tightening control over overseas deals involving Chinese investors, technology, data, and national security. Effective July 1, these regulations require authorisation for exports and provide a legal basis to unwind overseas transactions, targeting sensitive sectors like tech and AI while increasing compliance risks for global investors.

In a significant move to assert control over outbound transactions, China announced new regulations to tighten oversight on overseas deals involving its investors, technology, data, and national security. The rules come into effect on July 1, under directives from the State Council.

The regulations provide China with the ability to reverse completed overseas transactions, introducing heightened compliance challenges for global investors in sensitive areas like technology and AI. This follows the recent unwinding of Meta's acquisition of Manus due to unclarified outbound investment violations.

Beijing's latest measures target cross-border talent transfers in sensitive sectors, impacting firms seeking to relocate operations abroad. Moreover, these rules authorize security reviews of foreign investments affecting national security, and enforce fines or investment cessation for non-compliance.