On June 1, 2026, Chinese Premier Li Qiang signed the State Council Order officially promul-gating the "Regulations on Outbound Investment" (《国务院关于对外投资的规定》). This marks a significant milestone in China's approach to international investment. Rather than restricting overseas expansion, these regulations establish a comprehensive framework that, when properly navigated, can facilitate more strategic and sustainable Chinese outbound invest-ment especially in key markets such as Germany.
A Framework for Strategic Growth
Entering into force on July 1, 2026, the new regulations represent China's commitment to advancing "high-level opening up" and promoting the "high-quality development of outbound investment". This comprehensive approach consolidates previously scattered rules across various ministries and provides Chinese investors with clearer guidance on how to successfully expand internationally while maintaining compliance with both Chinese and foreign regulations.
Key provisions of the new framework include:
- Comprehensive scope and application: The regulations apply to all outbound investments by Chinese investors, including direct or indirect acquisitions of enterprises, assets, or related rights in other countries or regions. Investments in Hong Kong, Macau, and Taiwan are managed under similar rules.
- General principles governing outbound investment: The framework emphasizes adherence to the overall concept of national security, strengthening the management and service system for outbound investments, and improving the quality and level of such investments. It aligns with high-standard international economic and trade rules, promotes high-quality Belt and Road Initiative cooperation, and fosters international collaboration in industrial and supply chains. Investors are encouraged to make outbound investments on a market-oriented basis.
- Comprehensive service systems: The regulations establish enhanced overseas comprehensive service systems, with provincial and central government departments improving public service capabilities. Professional service institutions are explicitly supported to provide high-quality specialized services to Chinese investors. Industry associations, chambers of commerce, and trade and investment promotion organizations are encouraged to offer information consultation and rights protection services.
- Regulatory oversight and supervision: The framework introduces improved regulatory measures, implementing categorized and graded full-process supervision to strengthen risk prevention and enhance the scientific and secure nature of outbound investments. Investors must comply with national regulations for filing approvals, information reporting, and cross-border capital registration. They are also required to take primary responsibility for the compliance and risk management of their outbound investment activities and avoid disrupting the outbound investment market order.
Enhanced Protection for Chinese Investors
One of the most significant aspects of the new regulations is their focus on protecting Chinese investors' legitimate rights and interests abroad. The framework includes:
- Monitoring mechanisms: Mechanisms to strengthen monitoring, early warning, and risk assessment to help investors prevent security risks
- Mechanisms for investigating investment barriers: New mechanisms to investigate and address discriminatory practices against Chinese investors
- Dispute resolution support: Encouragement of multiple dispute resolution methods including consultation, mediation, arbitration, and litigation
- Reciprocal countermeasure mechanisms: Authority to take appropriate measures in response to discriminatory restrictions or prohibitions imposed on Chinese investors by foreign jurisdictions, including, where applicable, measures available under the PRC Anti-Foreign Sanctions Law and other relevant Chinese legislation.
Germany: A Strategic Destination for Chinese Investment
These developments come at a particularly relevant time for Chinese-German investment relations. Germany continues to be an attractive destination for Chinese investors, particularly in high-tech manufacturing and advanced services sectors. The new Chinese regulations align well with Germany's own evolving foreign investment framework, which is expected to be updated in line with new EU standards by mid-2026.
For Chinese investors considering German opportunities, the new regulations provide several advantages:
- Clearer compliance pathways: The consolidated framework reduces regulatory uncertainty and provides clearer guidance on approval processes
- Enhanced government support: Improved public services and professional guidance for overseas investments
- Better risk management: Systematic approaches to identifying and mitigating overseas investment risks
The Critical Role of Legal Compliance
The new regulations underscore the importance of professional legal guidance in cross-border transactions. Chinese investors must navigate not only the new Chinese outbound investment framework but also German and EU foreign investment controls, competition law, and sector-specific regulations.
Key compliance areas include:
- Outbound approval processes: Ensuring proper Chinese regulatory approvals and filings
- German investment screening: Navigating Germany's foreign investment control regime under the AWG (Foreign Trade and Payments Act) and AWV (Foreign Trade and Payments Ordinance)
- Ongoing compliance: Meeting reporting requirements and operational restrictions in both jurisdictions
Looking Forward: Opportunities in Uncertainty
While global investment flows face various challenges, the new Chinese regulations demonstrate Beijing's continued commitment to international economic integration. The framework's emphasis on "market-oriented principles" and alignment with "international high-standard economic and trade rules" suggests opportunities for well-advised Chinese investors to continue expanding globally.
For Chinese companies considering German investments, the key to success lies in early engagement with experienced legal counsel who understand both Chinese outbound investment requirements and German regulatory frameworks. This dual expertise is essential for:
- Structuring transactions to meet both Chinese and German regulatory requirements
- Identifying potential compliance risks before they become problems
- Developing strategies that align with both countries' policy objectives
- Ensuring smooth transaction execution and post-closing compliance
Conclusion
China's new outbound investment regulations represent an evolution, not a retreat, in Chinese international investment policy. By establishing clearer frameworks and stronger support systems, these regulations can facilitate more strategic and sustainable Chinese investment abroad. For Chinese investors with German ambitions, success will depend on understanding and embracing these new compliance requirements as a foundation for long-term international growth.
The regulatory landscape may be complex, but with proper legal guidance, Chinese investors can continue to find significant opportunities in Germany's dynamic economy while meeting the highest standards of international compliance.
Dr Jenna Wang-Metzner
Lelu Li
