China imposes new national‑security rules on overseas investments

China announced a new regulatory framework that subjects Chinese companies' investments abroad to a national‑security review. The rules require authorities to classify each overseas investment as encouraged, restricted or prohibited based on its potential impact on national interests, technology, and strategic assets. The measure expands earlier controls on outbound capital flows and foreign firms operating in China, giving the state power to intervene, demand divestments or halt projects deemed a security risk.

The policy shift comes amid heightened geopolitical tension with the United States and the European Union, which have increased restrictions on Chinese firms in sectors such as semiconductors, artificial intelligence and critical minerals. By extending scrutiny to Chinese firms’ overseas activities, Beijing aims to safeguard technology, prevent capital outflows and maintain strategic advantages in global supply chains.