(Adnkronos) – “Strengthening openness” and at the same time “protecting sovereignty, national security and development interests”. With these stated objectives, a new regulation on foreign (outbound) investments comes into force in China, amidst ongoing competition with Washington. The Asian giant intensifies controls. The new rules provide authorities with a sufficiently broad legal framework to guide and influence capital and human flows.
For Beijing, sectors such as artificial intelligence, chips, and green technology are fields of crucial importance both economically and strategically, and the Asian giant has promised to focus on their internal development. According to the Chinese State Council, the new rules serve to “improve the quality and level of foreign investments”. They must respect “the general concept of national security,” the new rules state, and aim to “balance domestic and international considerations”. The Beijing government, which often views cross-border transactions with suspicion, will be able to conduct investment reviews. In fact, restrictions on transactions outside China will no longer be limited to the transfer of goods and data, but will also cover the provision of services, such as sending technicians abroad.
In the context of competition with Washington, Beijing aims to protect its internal expertise in the field of artificial intelligence, but the new rules risk cutting off the rest of the world from Chinese investments, commented Alicia Garcia-Herrero, an economist at Natixis, to AFP, speaking of a “terrible situation for Europe,” which – she said – will have to seek strategic partnerships with other key players, such as Japan and South Korea, “if it wants a chance not to become too dependent”.
