EU-China Investment Screening: What You Need to Know

Both the EU and China have investment screening mechanisms that can affect cross-border deals. This guide explains the regulatory landscape.

EU Investment Screening

EU Framework Regulation

The EU has established a cooperation mechanism for screening foreign investments:

• Information sharing between member states
• Commission opinions on investments
• Focus on security and public order

Member State Regimes

Individual countries have their own screening:

• Germany: AWV investment screening
• France: Foreign investment control
• Italy: Golden power provisions
• UK: National Security and Investment Act

China Investment Screening

Foreign Investment Law

China's framework includes:

• Negative list for restricted/prohibited sectors
• National security review for sensitive investments
• Information reporting requirements

National Security Review

Applies to investments in:

• Military and defense
• Critical infrastructure
• Key technologies
• Important agricultural products
• Energy and resources

Practical Implications

For EU Companies Investing in China

• Check negative list before investing
• Assess national security review triggers
• Plan for approval timelines
• Consider structure to minimize restrictions

For Chinese Companies Investing in EU

• Multiple country reviews may apply
• Sensitive sectors face greater scrutiny
• State-owned enterprises face additional review

Recent Trends

• Increased scrutiny of technology investments
• Healthcare and biotech under review
• Data-related businesses face restrictions
• Longer review timelines