China Rolls Out New Rules For Foreign Investments Citing National Security Concerns


Andrew Jose Contributor
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The Chinese government released new rules Saturday to tighten its evaluation of foreign investments in the country, one day after the U.S. blacklisted many Chinese firms.

China’s National Development and Reform Commission, the country’s economic planning agency, published the rules Saturday that cover foreign investments near military facilities and foreign attempts to take over Chinese firms in key industries, according to Reuters.

Those industries include energy, equipment manufacturing, infrastructure, transport, information technology, internet tech, and financial services. (RELATED: China-Based Zoom Employee Spied On Dissidents At Direction Of Chinese Intelligence, Feds Say)

The commission defended the move, saying it wasn’t protectionist and citing national security concerns.

“The rules on foreign investments are not protectionism, nor are they a regression in opening up,” the commission’s website stated, according to the South China Morning Post. “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.”

The regulations proposed by the planning agency and China’s Ministry of Commerce are set to take effect on January 18, 2021, Chinese state broadcaster CGTN reported

The new rules dictate that firms and projects set up by foreign companies or joint ventures in China, foreign takeovers of Chinese companies, or foreign minority stakeholders with sufficient voting rights in Chinese firms, could face a security review, the South China Morning Post reported.

China’s announcement came after the United States added more Chinese companies to a trade blacklist Friday over human rights violations. 

“The Chinese Communist Party’s malign activity at home and abroad harms U.S. interests and undermines the sovereignty of our allies and partners,” Secretary of State Mike Pompeo said in a statement about the blacklist. “The United States will use all countermeasures available, including actions to prevent People’s Republic of China (PRC) companies and institutions from exploiting U.S. goods and technologies for malign purposes. Today’s actions mark yet another sign of our resolve.” (RELATED: ‘Uighur Alarms’ Just The Latest In Long List Of China’s Worst Human Rights Abuses)

Two weeks ago, China pushed a “tit-for-tat” export control policy regulating the export of “controlled items,” after Washington’s crackdown on Chinese firms, especially those with ties to the Chinese Government as part of what is known as the ‘U.S.-China Trade War, BBC reported.