China issued new regulations on June 1, 2026, to tighten control over outbound investments involving restricted goods, technologies, services, and data, aiming to curb technology and talent outflows amid rising U.S.-China competition [1, 2, 3, 4, 5, 6]. The rules require investors to obtain approval before transferring restricted Chinese assets overseas and will take effect on July 1, 2026 [1, 4, 5, 6].
Authorities can now conduct national security reviews of outbound investments and order investors to dispose of shares or stop investments if necessary [1, 5, 6]. The State Administration for Market Regulation also issued new trade secret protection rules effective June 1, which include digital assets such as data, algorithms, and code as protected trade secrets [7, 8, 9, 3]. The People’s Daily said, "With the profound development of the digital economy, digital assets such as data, algorithms, computer programmes, and code have become core trade secrets for enterprises" [8].
New trade secret rules impose strict security requirements on remote work and cross-border cooperation, limit access, and control user tracking to prevent technology leaks [7, 8, 9, 3]. Correspondingly, the market regulator launched a month-long enforcement campaign on June 1 targeting biomedicine, semiconductors, and AI sectors to crack down on malicious talent poaching and trade secret infringement [7, 8, 9, 3].
The regulations also prohibit cross-border talent transfers and technical training in sensitive sectors without government approval, in response to cases such as the Manus AI startup moving from China to Singapore before Meta’s April acquisition attempt [1, 7, 8, 9, 3, 6]. In April 2026, China ordered Meta to unwind its $2 billion acquisition of Manus, reflecting Beijing’s zero tolerance for such technology and talent transfers [1, 7, 8, 9, 3, 6].
China is reportedly restricting overseas travel for some top AI professionals at private firms including Alibaba and DeepSeek, signaling tighter controls on talent mobility in strategic sectors [3, 6]. Additionally, China threatens to retaliate against foreign firms whose home countries restrict Chinese investments by banning those firms from trading in China [1, 5, 6].
Chinese Premier Li Qiang signed the new outbound investment regulation on May 5, which comprises 34 articles setting these new controls [4, 5, 6]. The new outbound investment rules officially come into force on July 1, with authorities prepared to enforce stricter oversight on cross-border technology flows and talent mobility.
