China is tightening scrutiny of outbound capital flows after forcing the unwinding of the Meta-Manus deal, as authorities seek to safeguard the economy amid heightened technology rivalry with the U.S.
The State Council, China's cabinet, said Monday that the government will prohibit the unauthorized export or use of state-restricted goods, technology, services and data, according to rules approved in April.
Effective in July, the rules also ban indirect transfers of restricted technology and data through cross-border personnel deployments, training programs or technical guidance. Unauthorized outbound investment activities will be subject to penalties, including fines and investment bans, according to the State Council.
For unapproved investments that have already been made, authorities may order entities to halt investment activities and divest related shares and assets within a specified period.
Monday's announcement comes a month after China blocked Meta Platforms' acquisition of artificial-intelligence startup Manus on national-security grounds and ordered the $2.5 billion deal to be unwound.
