New NDRC Regulation for Chinese Outbound Investments

Abstract

The legal framework under which the “National Development and Reform Commission of the People’s Republic of China” (NDRC) reviews Chinese outbound investments has changed. On March 1, 2018, new NDRC procedural regulations came into effect, superseding the provisional rules legislated in 2014. As to the scope of application of the NDRC procedure, the new regulations provide numerous clarifications in addition to also including several extensions. At the same time, the latest reform clearly shows that by leaving behind a system of approval reservation and changing to a system of supervision during and after investment, at least for certain types of outbound investments, the procedural economics approach is being further pursued. Paying careful attention to the original Chinese text, this article takes these developments and the former rules as a starting point for a close analysis of the newly designated procedures and scope of application. The paper also sketches out what effects can be expected in application and practice.