CHINESE OUTBOUND INVESTMENTS – THE SELLER’S PERSPECTIVE -

1. CHINESE REGULATION –

1.1 The Chinese Regulations Applicable to Chinese Outbound Investments –

Generally, any outbound investment by a Chinese enterprise must be approved by the competent authorities and their local-level bodies before it can be closed. Each competent authority has its own approval requirements for outbound investments, which differ according to the type of investor, the amount of investment in question and other relevant factors. The competent authorities are as follows:

1.1.1 The National Development and Reform Commission (NDRC) -

The current NDRC regulatory framework for outbound investments is mainly a “record filing system” which means that a simplified consent is necessary.1 ”Approval” (granted after an in depth review)2 is only required in exceptional cases. The approval procedure is triggered only by the investments involved in sensitive countries and regions (jurisdictions with no diplomatic relationship with China or subject to UN sanctions) or sensitive industries, such as those relating to weapons, cross-border water resources or news media. The NDRC reviews outbound investments to assess whether the investment target helps to foster the Chinese economy as laid down in the “Chinese 2025 plan” and the “belt road initiatives,” for example.