China issues new outbound investment regulation to control AI startups (legrandcontinent.eu)

• New outbound investment regulation (Decree 837) effective July 1, 2026.
• Government approval required for overseas investments in sensitive tech sectors.
• Manus case: Chinese AI startup's Meta acquisition blocked, founders barred from travel.
• Penalties up to 10% of investment amount for violations.
• Regulations also apply to Hong Kong, Macau, and Taiwan.
• Chinese overseas M&A in Q1 2026 fell 28% year-on-year.

"China will enforce a new outbound investment regulation (Decree 837) starting July 1, 2026, imposing strict controls on Chinese companies investing abroad in sensitive technologies like AI. The regulation was triggered by the Manus case, where a Chinese AI startup moved to Singapore for a Meta acquisition, which Beijing blocked. The rules require government approval for outbound investments, allow bans on foreign investment in China, and penalize discrimination against Chinese suppliers. In Q1 2026, Chinese overseas M&A dropped 28% year-on-year."