Editorial: Is China's standardized outbound investment "building an economic fortress"

The "Regulations of the State Council on Outward Investment" (hereinafter referred to as the "Regulations"), which came into effect on July 1st, have been distorted and interpreted by some Western media. Some say that China's requirement for companies to undergo scrutiny before going global is a "construction of economic fortresses"; Some say that China is building a 'new Great Wall' and 'keeping as much capital, technology, and talent as possible within its own territory'. In fact, the "Regulations" are not "closed" or newly established "barriers", but rather elevate the practical experience scattered in various departmental regulations to administrative regulations, providing a clearer and more stable framework of rules. This is precisely a manifestation of mature and balanced high-level opening up to the outside world.

The first article of the "Regulations" clearly states that the purpose of issuing new regulations is to "promote high-level opening up to the outside world, promote high-quality development of foreign investment, effectively implement foreign investment management, protect investors and their legitimate rights and interests in foreign investment, and safeguard national sovereignty, security, and development interests. The Regulation clearly supports investors to carry out outbound investment activities in accordance with market-oriented principles and actively participate in international cooperation and competition. Investors have the right to make independent decisions, bear their own risks, and be responsible for their own profits and losses when investing abroad in accordance with the law. Connect with international high standard economic and trade rules, promote high-quality joint construction of the "the Belt and Road", promote international cooperation in the industrial chain supply chain, and oppose unilateralism and protectionism. These are not signals of 'closed retreat', but rather signals of actively embracing economic globalization.

National security review is not unique to China, but an internationally recognized practice. The Regulations explicitly require the establishment of a security review system for overseas investments, strict management of investment transfers that affect national security, and the construction of a strong national security barrier. This is a measure that any sovereign state should take. In recent years, major economies including the United States have generally strengthened their security reviews of cross-border investments, including key technologies, critical infrastructure, sensitive data, etc., which are included in their key regulatory scope. It is entirely reasonable and lawful for China to improve its corresponding review system while expanding its opening-up. With the continuous innovation and breakthroughs in China's high-end manufacturing industry and cutting-edge technology fields, it is necessary and urgent to prevent the abnormal loss of key technologies and key links in the industrial chain in investment activities.

The core essence of the "Regulations" is to encourage and protect enterprises, providing clear "guidelines" and "safety belts" for Chinese enterprises to go global. In the past two decades, some Chinese enterprises, especially private enterprises, have not applied professional cross-border laws and financial services when investing in the "the Belt and Road" countries. Once encountering unreasonable suppression or improper demands from the local area, they tend to choose to "accept their misfortune" and rarely seek legal means to protect their rights. The international practice and advanced approach is to rely on the collaborative support of professional investment banks, consulting firms, domestic government departments, industry associations, and cross-border financial institutions to obtain high-quality projects and negotiation chips. The promulgation of the Regulations is a systematic response to these long-standing pain points.

As China's opening-up pattern shifts from simply "domestic production and export earnings" to global layout of production capacity, technology, and capital, this deepening process of "going global" will inevitably be accompanied by more risks and challenges. The Regulation strengthens the government's service and protection functions, and requires more standardized management: providing "one-stop" support such as policy consultation, investment guidance, legal aid, risk warning, finance and insurance; At the same time, coordinate professional institutions, industry associations, and overseas institutions to work together and provide support for enterprises like a "support group". This "ecological synergy" model will help Chinese overseas enterprises enhance their risk response capabilities and international competitiveness, and take a crucial step towards stabilizing the transition from foreign trade to global investment.

In reality, some countries have set a large number of discriminatory barriers and unilateral sanctions against Chinese investment, leading to risks for overseas assets of Chinese enterprises. In response, the Regulation specifically establishes an investment barrier investigation and countermeasures mechanism - when enterprises encounter discriminatory investment barriers or other investment and operation obstacles, the Chinese side has the right to organize investigations in accordance with relevant laws, and if necessary, include relevant organizations and individuals in the countermeasures list. The new regulations not only provide a shield for risk prevention and control, but also forge a sword for necessary countermeasures, improving the integrity and operability of the foreign investment management system. At the same time, the "Regulations" also have clear provisions to regulate the behavior of enterprises "going global", emphasizing that foreign investment should comply with laws, regulations, and international practices, respect local customs and cultural traditions, abide by business ethics, be honest and trustworthy, compete fairly, fulfill social responsibilities, and maintain the national image.

Faced with the rise of global trade protectionism and the continuous demonization of China's economic development achievements by some Westerners, the "Regulations" respond to the challenges of the times with confidence in the rule of law and clearly convey China's firm determination to continue expanding its high-level opening-up to the outside world. We sincerely welcome enterprises from all countries to invest and develop in China, and fully support Chinese enterprises to go global and achieve common development through mutual benefit and win-win cooperation.