China's New National Security Review Rules: How Will it Affect Foreign Investments

March 05, 2021 | BY

Susan Mok

Scott Yu and Frank Jiang of Zhong Lun Law Firm highlight recently introduced national security measures for review of foreign investments including its broader reach within China, the scope of M&A targets and expanded sectorial coverage, and the new review mechanism coordinated by the NDRC

 

While China has endeavored to streamline foreign investment approval through pre-establishment national treatment plus a negative list system under the framework of the PRC Foreign Investment Law (中华人民共和国外商投资法), there has been an increased emphasis on safeguarding national security, a trend also gaining more prominence in other jurisdictions such as the U.S. (through the review of the Committee on Foreign Investment in the United States ) and the EU (via an foreign direct investment screening).  As part of these efforts, on Dec. 19, 2020, China's National Development and Reform Commission (the NDRC) and Ministry of Commerce (MOFCOM) published the Measures for the Security Review of Foreign Investments (the FISR Measures) (外商投资安全审查办法), becoming effective as of Jan. 18, 2021.

 

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