Chinese outbound investment regulations 2026: Navigating the technology transfer restrictions of Decree No. 837
China is tightening state control over corporate investments abroad. The aim is to protect sensitive technologies, data, and research know-how from uncontrolled outflow to foreign countries. Ecovis experts explain the far-reaching implications of Decree No. 837, which came into effect on 1 July 2026.
The focus of the new State Council Decree No. 837 – which has so far received little international attention – is on new regulations for Chinese companies with overseas branches or investments. In particular, key technologies may no longer be transferred abroad, whether directly or indirectly, by means such as subsidiaries, joint research projects, employee training, or personnel transfers (Article 13). The new rules are intended to prevent foreign subsidiaries from being used to transfer strategically sensitive technologies beyond state oversight.
Certain strategic technologies and data require additional authorisation. This may also affect cross-border research and development activities, technology licensing arrangements and cooperation projects involving Chinese entities. At the same time, the regulation calls for closer cooperation between those subject to it and the regulatory authority, together with expanded powers of oversight for the government.
Which technologies are affected
The new restrictions apply in particular to the following technologies:
- rare-earth processing
- lithium-battery manufacturing for electronic vehicles
- AI-Algorithms
- biotechnology and aerospace guidance systems
Seek advice on the new regulation if you are planning corporate investments abroad.
Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
Background
The Decree follows high-profile events such as the Nexperia dispute and Meta Platforms’ aborted acquisition of Manus. It also serves as an effective trade-related countermeasure against investment barriers imposed by foreign countries. Pursuant to Article 23 of the Decree, the government may investigate on its own initiative whether Chinese investments abroad are being obstructed and adopt defensive and necessary measures in response. The Decree does not further define the scope of such measures, leaving the authorities considerable discretion in responding to perceived restrictions on Chinese outbound investment.
The impact reaches well beyond China itself
As the world’s third largest source of outbound investment, China maintains many long-time trade partners abroad who will be directly affected by these restrictions. International companies based in China, as well as those with subsidiaries or business partners there, may also see increased regulatory scrutiny in connection with joint ventures, technology licensing arrangements and cross-border research projects. Companies will therefore need reliable expertise in Chinese law
