00:00Let's talk to Xiaonin Shen, Head of International at CraneShares.
00:03Great to have you on Global Business Europe again.
00:05Now, many people hear outbound investment rules and immediately think tighter controls.
00:11What is this regulation actually about?
00:15China's new outbound investment regulation is really about moving from ad hoc approvals
00:21to a clearer rule-based framework for going global.
00:27It sets out in one place what investors can expect in terms of approvals, reporting and security reviews
00:35and what the support and protections they can expect from government once they go overseas.
00:42I think importantly, it doesn't try to stop company investing abroad.
00:46It aims to improve the quality of the outbound investments
00:51and really align with international best practice on compliance, on export controls and on risk management.
00:59So, while there are stricter requirements in sensitive areas like advanced technology and data,
01:05the broader signal is really go global, but do it more in a disciplined and sustainable way.
01:13But why has China chosen to introduce this new regulation at this particular moment?
01:18What's changed in the global investment environment?
01:22Great question.
01:23I think China is responding to a very different global environment and more geopolitical tensions,
01:31more scrutinies on technology and data flows and new outbound screening measures from other major economies.
01:38If you remember, in the United States, last year in January, they introduced this outbound investment program.
01:45It was similar to what we're discussing here.
01:50I think the new outbound screening measures from other major economies, including the United States,
01:55we just discussed, but Beijing wants a modern toolkit to manage national security risks
02:02without abandoning its long-term strategy for opening up and integrating Chinese corporates to global value chain.
02:13And I think at the same time, China's own outbound investments has grown in scale.
02:18Also, sophistications from traditional infrastructure into digital, into AI, into high-tech sectors,
02:25which now means naturally raise more complex legal and compliance questions.
02:31The regulation is really a way to cashing up the legal framework with the reality.
02:37And just quickly, Ashana, what does it tell us about China's next phase of opening up?
02:45Absolutely, go ahead.
02:47I think go internationalizing and go global, stay on tech on their agenda.
02:51They want to be more structural, more managed, but all the companies get the support they needed from the government
02:58in terms of growing their economic, excuse me, growing their business.
03:02Now, if they want to expand their business globally, they have a clear framework to follow,
03:08clear reporting line, clear approval process in place, which I think actually is better.
03:13Shalyn Shen from CraneShares, thank you very much indeed.
03:16Indeed.
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