Legal shield in focus for China's overseas assets

Accelerating the drafting of a law on the protection of overseas interests would help China build a more comprehensive legal framework to safeguard its assets and activities abroad, said national legislators and business leaders on Tuesday.

They said this move could provide clearer legal backing for Chinese enterprises operating overseas, strengthen their risk-prevention mechanisms and improve coordination among government agencies in responding to geopolitical, security and regulatory challenges.

A more systematic framework would enhance protection for Chinese investments, infrastructure projects and personnel abroad, while offering companies greater certainty when expanding into markets involved in the Belt and Road Initiative and beyond, said Zhang Shuibo, a deputy to the 14th National People's Congress and a professor of economics at Tianjin University.

Due to the large capital outlays and long investment cycles associated with infrastructure projects, many Chinese companies in certain countries are concerned that policy shifts in host governments could pose risks to the security of their overseas assets, said Zhang.

According to the Government Work Report submitted to the fourth session of the 14th National People's Congress for deliberation last week, China will strengthen risk prevention for outbound investment and protect the country's overseas interests.

Many countries with significant overseas investments have already established legal frameworks to protect their interests.

For example, the United States relies on the Foreign Assistance Act and a framework built around extraterritorial jurisdiction under domestic law, overseas investment insurance and bilateral investment treaties, covering areas such as investment, security, personnel and finance.

Similarly, the European Union has mechanisms such as the EU's Anti-Coercion Instrument and its external action framework, while Japan has enacted the Economic Security Promotion Act.

Zhang said that basing the protection of overseas interests on domestic legislation and extending the extraterritorial application of national laws has long been a common practice among major economies seeking to safeguard their investments and assets abroad.

"In this context, a proposed law should be positioned as a comprehensive and overarching statute, providing a foundational framework to coordinate existing regulations while aligning with China's broader national security strategy," he added.

The push for stronger legal safeguards comes as China's outbound direct investment continues to expand. The country's nonfinancial ODI grew by 1.3 percent year-on-year to $145.66 billion in 2025, while nonfinancial ODI in Africa, Europe and Asia increased by 41 percent, 20.9 percent and 1.2 percent, respectively, said the Ministry of Commerce.

Zhong Bo, another deputy to the 14th NPC and chairman of Chengdu, Sichuan province-based projector manufacturer XGIMI, said China's efforts should focus on establishing clear remedies to protect overseas investments, commercial interests and the safety of Chinese personnel.

Echoing that view, Shi Xiaoli, a professor of international trade law at China University of Political Science and Law in Beijing, said this could include provisions prohibiting unlawful expropriation, nationalization or discriminatory restrictions by host governments.

Song Hailiang, a member of the 14th National Committee of the Chinese People's Political Consultative Conference, said strengthening infrastructure connectivity, especially cross-border transport links, will help Chinese companies improve supply chain coordination, expand openness, enhance global competitiveness and better safeguard their overseas interests.

"Reliable transport corridors provide crucial safeguards for China's energy and resource supply, as well as the security of overseas assets and personnel, strengthening the country's strategic autonomy and resilience in a complex international environment," said Song, who is also chairman of China Communications Construction Co, a Beijing-based centrally administered State-owned enterprise.

China should step up efforts to advance projects such as the China-Kyrgyzstan-Uzbekistan Railway and the Trans-Caspian International Transport Route, strengthening its physical connectivity with Eurasia and neighboring regions, while removing systemic bottlenecks that hinder cross-border connectivity, he added.

zhongnan@chinadaily.com.cn