What new curbs will extend beyond goods and data under these rules?

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New curbs will extend beyond goods and data to include the export of services under China's new national security regulations for overseas investments.

China's intensified scrutiny of overseas investments, effective from July 1, introduces broad "national security" regulations that extend existing curbs beyond goods and data. These new measures will now encompass the export of services, specifically through the dispatch of technical experts abroad or the provision of training overseas. This development occurs amidst rising technological competition with the United States and aims to enhance the quality and level of outward investment.
Export of Services Now Subject to Curbs

The regulations explicitly state that existing restrictions on cross-border transfers will now cover the export of services. This means that activities such as sending Chinese technical experts to work in foreign countries or conducting training programs abroad will fall under the purview of these national security reviews. This expansion aims to align outward investment with China's "overall national security concept."
Broader National Security Framework for Investments

The new rules provide a sweeping legal framework for authorities to influence capital and personnel flows across China's borders, driven by a desire to protect economically and strategically vital sectors like artificial intelligence and computer chips. The State Council, China's cabinet, outlined these provisions to "enhance the quality and level of outward investment."
Investor Concerns Regarding Market Access

Despite the stated aims, some investors express concerns that these regulations could restrict the ability of China's tech ecosystem to access global markets. The framework authorises the government to conduct reviews of any investments or transfers that could potentially impact national security, granting authorities significant discretion.
Precedent of Scrutiny on Cross-Border Transactions

Beijing has previously shown a tendency to view cross-border transactions with suspicion. An instance cited involved the rejection in April of Facebook owner Meta's attempt to acquire AI startup Manus, which had roots in China but was based in Singapore. This demonstrates a pattern of national security considerations influencing foreign investment decisions.

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What new curbs will extend beyond goods and data under these rules?

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