Overhaul of China’s Outbound Investment Regime Continues

September 23, 2014

China’s National Development and Reform Commission recently issued the Administrative Measures for Ratification and Filing of Outbound Investment Projects, effective as of May 8, 2014 (the “NDRC Outbound Measures”).1 After issuing complementary draft measures at almost the same time, on September 6, 2014, the Ministry of Commerce issued the final version of the Administrative Measures for Overseas Investment (the “MOFCOM Outbound Measures”)2 to be effective as of October 6, 2014.3 The NDRC Outbound Measures and the MOFCOM Outbound Measures aim to reduce administrative oversight of outbound investments by delegating more approval and filing authority to these regulators’ local counterparts. While the effort is laudable, it remains tentative.


Outbound investments by Chinese companies are subject to approval or filing procedures with the NDRC (or its local offices) and MOFCOM (or its local offices) before the investment is made. The NDRC, which has jurisdiction to review all fixed-asset investments, focuses on, among other factors, whether a project is in line with the industrial policies of the state and whether the prospective investor has the investment capacity to carry out the project. In turn, MOFCOM has the power to review all cross-border enterprise-formation matters whether by greenfield investment, merger and acquisition, or otherwise. Under the NDRC Outbound Measures and the MOFCOM Outbound Measures, the filing process will take less time and be less burdensome.

China’s outbound investment regime has undergone several rounds of changes aiming to simplify the procedure and delegate power from central government authorities to provincial or municipal authorities. The government’s latest initiative commenced when the State Council issued the Notice Regarding Issuance of the Catalogue of Investment Projects Subject to Government Approval in November 2013.

Among other things, the 2013 Catalogue established principles to govern whether an outbound investment matter will be subject to an approval or filing with NDRC and MOFCOM, and whether the review will be conducted by central-level authority or local authority. More outbound investments became subject to local filing procedures under the 2013 Catalogue, a change welcomed by the market as local filing procedures are typically more expeditious. The NDRC Outbound Measures and the MOFCOM Outbound Measures extend these principles by establishing specific details.

New Approval and Filing Regime

Type of Outbound Investment Amount of Chinese Investment NDRC Approval or Filing MOFCOM Approval or Filing
Normal Outbound Investment Conducted by centrally-managed state owned enterprises US$ 1 billion or above Approval by NDRC Filing with MOFCOM
Less than US$ 1 billion Filing with NDRC
Conducted by entities other than centrally-managed state owned enterprises US$ 1 billion or above Approval by NDRC Filing with provincial level offices of MOFCOM
US$ 300 million or above but less than US$ 1 billion Filing with NDRC
Less than US$ 300 million Filing with provincial level offices of NDRC
Outbound investment in sensitive countries (regions) or sensitive industries US$ 2 billion or above Examination by NDRC and approval by the State Council Approval by MOFCOM
Less than US$ 2 billion Approval by NDRC

Although the terms “sensitive countries (regions)” and “sensitive industries” are used in the NDRC Outbound Measures and the MOFCOM Outbound Measures, the definitions of these terms in the two regulations are slightly different.

  NDRC Outbound Measures MOFCOM Outbound Measures
Sensitive Countries (Regions) Countries that have not established diplomatic relations with China
Countries that are subject to international sanctions Countries that are subject to sanctions by the United Nations
Countries or regions where a war or riot, etc. is ongoing MOFCOM may issue a list of sensitive countries (regions) when necessary
Sensitive Industries Basic telecommunication operation, cross-border water resource development and utilization, large-scale land development, main power transmission lines, electrical grids, and news media Industries involving products or technologies whose exportation is prohibited or restricted by China, or where multiple countries (regions) have an interest4 – e.g., a cross-border water resource development project.

Potential Impacts

The most significant change introduced by the NDRC Outbound Measures and the MOFCOM Outbound Measures is the replacement of a pre-approval regime with a pre-filing regime for outbound investments (other than outbound investments in sensitive countries, regions or industries) less than $1 billion, regardless of whether the outbound investment is made in a resource or non-resource sector, with foreign currency self-owned or purchased by the Chinese investor, or for the purpose of establishing a non-PRC special purpose company or otherwise.

The positive impacts of these liberalizing changes are expected to include:

1. Making Chinese investors already disposed to outbound opportunities more open to execute them in response to the reduced complexities and timelines.

2. Bringing heretofore domestically focused businesses that do not generate foreign exchange into the fold of companies disposed to outbound opportunities by virtue of eliminating as a factor in the review/approval process whether the needed foreign exchange is self-owned.

3. Boosting the appetite for investments in resource sectors which previously required approvals from NDRC and MOFCOM.

Although the NDRC Outbound Measures and the MOFCOM Outbound Measures are the latest in a series of changes aiming to simplify and encourage China’s “Going Out” strategy, the new measures retain the long-held principle that any and all outbound investments by Chinese companies must be subject to at least some level of prior review by the Chinese authorities.

1. The NDRC Outbound Measures retain the requirement that the Chinese government authorities whose involvement will typically be necessary to complete an outbound investment (e.g., foreign exchange, customs, entry-exit administration, taxation, etc.) cannot facilitate the investment until the relevant NDRC filing or approval has been completed.

2. The NDRC Outbound Measures clarify an existing restriction that Chinese financial institutions cannot grant a loan for an outbound investment (the main funding source for Chinese investors) until the relevant NDRC filing or approval has been completed.

3. The MOFCOM Outbound Measures continue to provide that failure to comply with the MOFCOM Outbound Measures will cause the Chinese investor to be ineligible for various government support programs (covering such things as financing, customs, etc.) for three years.

4. The NDRC Outbound Measures retain the requirement that a Chinese acquiror must submit a project information report and obtain a confirmation letter from the NDRC (popularly known as a “Road Pass”) before undertaking any “substantive work” (which includes making a binding offer or signing a binding acquisition agreement) in connection with any outbound Chinese investment of $300 million or more.

• The NDRC is required to make its determination whether to issue the Road Pass within seven business days following its receipt and acceptance of the project information report.

• Given the dispute surrounding one recent failure by a company to obtain the required Road Pass, it is logical to expect that this requirement will be more aggressively enforced in the future.5

5. The NDRC Outbound Measures retain the requirement that if an outbound investment will entail a long preparation period or require significant upfront expenses, a Chinese investor must conduct a pre-filing or seek an approval from the NDRC even prior to seeking a Road Pass (if required) and fulfilling the pre-filing or pre-approval in respect of the outbound investment.

6. The NDRC Outbound Measures and the MOFCOM Outbound Measures have established timelines for the different stages of the filing and/or approval process. The chart below outlines the time frames within which MOFCOM and NDRC must take action under their pre-filing and approval processes. (To simplify the chart, we assume that the outbound investment is made by a centrally-managed state owned enterprise and is not subject to the approval by the State Council).

  • Five business days from NDRC’s receipt of the filing package
    • Decide to formally accept the application for filing or notify the investor to provide supplemental or amended materials
  • Seven business days from NDRC’s acceptance of the filing package
    • Complete NDRC’s review
  • Three business days from MOFCOM’s acceptance of the filing package
    • Decide whether the filing form has been filled truthfully and completely6
    • Complete MOFCOM’s review
  • Five business days from NDRC’s receipt of the application package
    • Decide to formally accept the application or notify the investor to provide supplemental or amended materials
  • 20 business days, plus 10 business days (if necessary),* from NDRC’s acceptance of the application
    • Consult with relevant authorities
    • Complete NDRC’s review
*The above mentioned timeline does not include the time for evaluation of the outbound investment project by an evaluation firm engaged by NDRC (if applicable).
  • Three business days from MOFCOM’s receipt of the application package
    • Decide to formally accept the application or notify the investor to provide supplemental or amended materials
  • 20 business days from MOFCOM’s acceptance of the application7
    • Consult with relevant economic and commercial departments (offices) of the Chinese embassies (consulates)
    • Complete MOFCOM’s review.

It is well known among M&A practitioners that, other things being equal, the Road Pass and pre-approval requirements have put Chinese acquirors at a material disadvantage in competitive M&A bidding situations. Although the changes to be ushered in by the NDRC Outbound Measures and the MOFCOM Outbound Measures will ameliorate this disadvantage to some degree, the streamlined review/approval periods still mandated by the new measures may prove as ephemeral in practice as the specified review periods that apply to MOFCOM’s M&A anti-monopoly review process.8


The streamlined approval and filing procedures of the NDRC Outbound Measures and the MOFCOM Outbound Measures will provide additional impetus to China’s already robust outbound investment. But while the changes are welcome, it remains to be seen whether their execution will yield a substantial improvement.

1 These measures replaced the Interim Administrative Measures for Ratification of Outbound Investment Projects effective as of October 9, 2004.

2 The only substantive change from the draft MOFCOM Measures related to the approval and filing regime is that “countries or regions where a war or riot, etc. is ongoing” has been deleted from the scope of “sensitive countries (regions)” in the MOFCOM Outbound Measures. Instead, the MOFCOM Outbound Measures provide that MOFCOM may issue a list of sensitive countries (regions) when necessary. The MOFCOM Outbound Measures will replace the existing Administrative Measures for Overseas Investment effective as of May 1, 2009.

3 Our Alert on the NDRC Outbound Measures and the draft MOFCOM outbound measures was issued on April 28, 2014. This Alert amends and restates our April 28 Alert.

4 Because of the absence of a clear definition, this latter category is subject to being broadly interpreted. For example, a port which may be located in one country but whose operations may impact the interests of other countries that share the same sea area, could easily be deemed a matter involving “multiple countries (regions).”

5 See the dispute between Pudong Science and Technology Investment Co., Ltd and Tsinghua Unigroup Ltd. where PDSTI had obtained a Road Pass to acquire RDA Microelectronics, Inc. but Tsinghua Unigroup intervened and signed a written agreement to acquire RDA without first having obtained a Road Pass: and
Tsinghua Unigroup Ltd. (through a Cayman affiliate) closed the acquisition in July, 2014. However, it is unclear whether NDRC will take any further action against Tsinghua Unigroup Ltd.

6 The MOFCOM Outbound Measures do not provide a separate step for MOFCOM to notify the investor to provide supplemental or amended materials.

7 If MOFCOM does not notify the Chinese investor that MOFCOM accepts the application within the three business days, the 20 business day period will start from MOFCOM’s receipt of the application.

8 Although specific periods are mandated within which MOFCOM is required to complete its review of merger cases submitted for clearance under China’s anti-monopoly law, in practice the process significantly exceeds the mandated periods as a result of (i) unofficial prior consultations with MOFCOM regarding the necessity of a merger filing, (ii) pre-filing discussions in which MOFCOM requests information from the merging parties before accepting the filing package, and (iii) “requests” by MOFCOM to withdraw and re-submit a filing when it has not completed its review of an accepted filing by the mandated deadline.


中国国家发展和改革委员会(“发改委”)早前发布了《境外投资项目核准和备案管理办法》(“发改委管理办法”),该管理办法已自2014年5月8日起施行 。商务部(“商务部”)约于相同时间发布了对应的商务部管理办法征求意见稿,并于2014年9月6日发布定稿后的《境外投资管理办法》(“商务部管理办法”) ,而该商务部管理办法将自2014年10月6日起施行 。发改委管理办法以及商务部管理办法均旨在将更多的核准与备案权下放至地方有关发改和商务部门,以放宽对境外投资的行政管理监督。上述举措虽然值得称赞,但步伐仍旧缓慢。






境外投资类型 中方投资额度 发改委核准或备案 商务部核准或备案
普通境外投资 中央管理企业实施的投资 10亿美元及以上 发改委核准 商务部备案
10亿美元以下 发改委备案
地方企业实施的投资 10亿美元及以上 发改委核准 省级商务部门备案
3亿美元及以上、10亿美元以下 发改委备案
3亿美元以下 省级发改部门备案
涉及敏感国家(地区)、敏感行业的境外投资 20亿美元及以上 发改委提出审核意见,报国务院核准 商务部核准
20亿美元以下 发改委核准


  发改委管理办法 商务部管理办法
敏感国家(地区) 与中国未建交的国家
受国际制裁的国家 受联合国制裁的国家
发生战乱的国家和地区 必要时,商务部可另行公布其他实行核准管理的国家和地区名单
敏感行业 基础电信运营、跨境水资源开发利用、大规模土地开发、输电干线、电网、新闻传媒等 涉及使用国家限制出口的产品和技术、涉及多国(地区)利益4等,例如:跨境水资源开发项目。












• 发改委须在收到并受理项目信息报告后的七个工作日内决定是否发放小路条。

• 鉴于因一家企业最近未能取得所需的小路条而引起的争议,可以合理地预期将来该项规定将会得到更为有力的执行 。



  • 自发改委收到备案申请之日起5个工作日
    • 决定正式受理备案申请或通知投资人补正备案资料
  • 发改委受理备案申请之日起7个工作日
    • 发改委完成审查
  • 自商务部受理备案申请之日起3个工作日
    • 决定备案表是否如实、完整填写6
    • 商务部完成审查
  • 自发改委收到申请之日起5个工作日
    • 决定正式受理申请或通知投资人补正资料
  • 自发改委受理申请之日起20个工作日,外加10个工作日(如需要)*
    • 征求有关部门意见
    • 发改委完成审查
  • 自商务部收到申请之日起3个工作日
    • 决定正式受理申请或通知投资人补正资料
  • 自商务部受理申请之日起20个工作日7
    • 征求中国驻外使(领)馆经商处(室)的意见
    • 商务部完成审查

并购实务界众所周知,在其他条件相同的情况下,中方投资人由于受小路条和事先审批要求的影响,在竞标并购项目时处于严重不利的地位。虽然发改委管理办法和商务部管理办法所推出的这些改变将在某些程度上缓解不利条件,但是上述管理办法内所规定的简化审批时限就如同所规定的商务部并购交易反垄断审查期限一样在实践中虚无飘渺 。




2 商务部管理办法终稿与征求意见稿之间有关核准、备案制度的唯一一处实质性不同在于终稿从“敏感国家(地区)”中删除了“发生战乱的国家和地区”。取而代之,商务部管理办法规定,必要时,商务部可另行公布其他实行核准管理的国家和地区的名单。商务部管理办法将取代自2009年5月1日起施行的《境外投资管理办法》。

3 斌瀚有关发改委管理办法和商务部管理办法征求意见稿的法律评论发表于2014年4月28日。本评论旨在对4月28日的评论进行修订和重述。

4 由于“多国(地区)利益”一词没有明确定义,因此或被做广义解释。以港口为例,如果其地理位置在一个国家,而其运营可能会影响到同一海域其它国家利益的,则很容易被视为是涉及“多国(地区)利益”。

5 参见上海浦东科技投资有限公司与清华紫光集团有限公司之间的纠纷。该纠纷案中,浦东科技拿到了收购RDA Microelectronics, Inc.的小路条,而清华紫光半路杀出,未事先取得小路条即签署了收购RDA的书面协议,链接:。清华紫光集团有限公司(通过开曼群岛的一家关联公司)于2014年7月完成了收购交割。但是,尚不清楚发改委是否会对清华紫光集团有限公司采取任何进一步措施。

6 商务部管理办法内未规定商务部通知投资人补正资料的单独步骤。

7 如果商务部未在3个工作日内向中方投资人通知已受理申请,则上述20个工作日将自商务部收到申请之日起计算。

8 虽然商务部须在规定期限内审完根据中国反垄断法提交其审查的并购交易,但是实践中,由于以下原因,审查程序远远超出规定期限:(i)事先就申报的必要性与商务部进行非正式咨询;(ii)申报前的约谈,期间,商务部在受理申报之前会要求并购各方提交资料;以及(iii)商务部在规定期限内未审完所受理的申报时,“要求”申报人撤回申报并重新提交。

This article was originally published by Bingham McCutchen LLP.