China: China's NDRC Seeks Public Comments On Important Outbound Investment Regulatory Changes

Last Updated: 10 January 2018
Article by Nick Beckett, Vera Zhang and Roxie Meng

On 3 November 2017, the National Development and Reform Commission ("NDRC"), one of China's key outbound investment regulatory bodies, has issued the Announcement on Seeking Public Comments on the Administrative Measures for Outbound Investment of Enterprises (Draft for Comment) (the "Draft").

The Draft was prepared in light of the Guiding Opinions on Further Guiding and Standardising the Orientation of Overseas Investment issued by the State Council earlier in August this year, which required authorities to simplify the procedures for outbound investments and to increase the supervision on investment projects that may raise national security concerns. Compared to the current effective outbound investment regulation, namely the Administrative Measures for Approval and Record-filing on Overseas Investment Projects (the "Order No. 9"), several major changes have been proposed by the Draft.

Streamlining the administrative procedure

Compared to Order No. 9, the Draft proposed the following three new measures which aimed to streamline the approval and record filing procedure. The new measures aim to ensure the administrative procedure for outbound investment projects is more efficient, transparent, stable and predictable.

  1. Removing the "project information report" requirement

    Pursuant to Order No. 9, if an overseas acquisition or bid involved a Chinese party's investment amount of not less than USD300 million, the Chinese investor shall, before conducting any substantive work abroad, submit a "project information report" to the NDRC to obtain a confirmation letter on the potential investment. However, under the Draft, the "project information report" will no longer be necessary.

    The old information-reporting requirement has brought uncertainty to the timeframe of outbound investments. Chinese companies often find themselves hampered by such the requirement and may end up losing to other investors from other countries due to the onerous information-reporting procedure. Cancellation of such information report requirement can be considered a big benefit for Chinese outbound investors.
  2. Simplifying the approval and record-filing procedure

    Under the Draft, if a project meets certain criteria and becomes subject to any approval or record-filing obligation at the national level, the local Chinese investor, is now able to  submit the relevant application documents to NDRC directly, without going through the provincial-level government as was required under the previous Order No. 9. This change will significantly speed up the approval and record filing process for outbound investments.
  3. Extending the deadline for obtaining the approval document or record-filing notice

    Pursuant to Order No. 9, the approval document or record-filing notice for outbound investment needs to be obtained before a Chinese investor concludes any legally binding transaction document. The alternative was to set the obtaining of approval/record filing notice as a condition precedent before such transaction document can be effective. Such requirement was considered to be burdensome and not in line with international practice.

    The new Draft removed such requirements, the obtaining of such approval/record filing notice will only be required before the actual closing of the investment. This amendment will make it possible for Chinese investors to set the obtaining of approval/record filing notice as a condition precedent only for the completion of the transaction, which is in line with international best practice.

    The Draft has also set out clearer timeframes and for the approval and record filing procedure, which will bring more certainty and predictability to the whole process. 

Increasing of supervision post-approval 

In addition to simplifying the administrative procedure, the Draft further increased the supervision on outbound investment projects post approval or record filing , in accordance with the reform guidelines set out by the State Council. The following three measures will focus on strengthening the examination of the authenticity and compliance of outbound investments, with an aim to manage and control potential national security risks.

  1. Investments made by overseas subsidiaries will be regulated

    Chinese companies investing abroad through its overseas subsidiaries used to be a "grey" area under the old regulatory regime.  The current draft clearly specified that such investment route will be subject to its regime. It is worth noting that, this change does not mean that all investments made via oversea subsidiaries will be subject to NDRC's approval or record filing requirement. As you can see from the summary in the chart below, whether an approval/record filing is required depends on the investment amount contributed by a Chinese domestic company, and whether such project falls within the geographic region or industry that is considered sensitive from a national security review perspective.

    Sensitive project?

    Investment amount from Chinese party

    Regulatory requirements


    Any amount

    Approval required


    ≥USD 300 million

    Record filing required


    <USD 300 million

    No approval/record filing required

  1. Adding new regulatory measures

    In accordance with the new Draft, NDRC will work together with other government departments to adopt new methods such as online monitoring, interviewing and spot checking etc. to co-supervise outbound investment projects.  Investors shall also report online on the completion of the project, or any unfavourable situation occurring to the investment, if any.
  2. Increasing the liabilities for breaching the law

    Under the Draft, the investor will be held liable for submitting false information, bribing, competing unfairly, damaging national security, breaching public policies or other illegal behaviours during the approval/record-filing procedure. The potential liabilities include administrative and criminal penalties to the Chinese investor and the relevant management responsible. The illegal behaviours will be recorded and published. The regulators attempted to strike a balance between the simplifying the administrative procedures and ensuring adequate supervision on investment directions.

Apart from the major changes listed above, the Draft also amended some other details. For example, NDRC is currently working on setting up an online platform for Chinese investors to be able to submit the applications for approval or record-filing online. The platform will serve to expedite the application procedure, and facilitate the government in supervising the investment.

In general, the new Draft is considered to be a good sign for all parties involved, as it demonstrates the Chinese government's determination to further open up to the international market, and to allow domestic companies to conduct outbound investment in a more efficient, predictable and better regulated manner.

The draft is open for public comments until 3 December 2017, CMS will continue to track its development.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions