Today — July 1, 2026 — Decree No. 837 of the Chinese State Council takes effect. This 34-article statute establishes a comprehensive regime regulating the outbound investments by Chinese companies, organizations, and individuals. Henceforth, such investments will be subjected to continuous supervision, mandatory reporting to state authorities, security reviews, and alignment of activities with China’s national goals — including the protection of the country’s image and the open notion of ‘general security’.
On the surface, the measure may seem to focus on domestic matters, but its true scope is broader: as the world’s third-largest investor, China’s outbound investment regime will shape a sizable portion of global industry under these conditions. And this broadened reach will be especially significant for Spain.
“China is the third-largest foreign investor in the world, so a significant volume of global industry may be directly affected”
Sánchez’s most recent trip to Beijing explicitly embraced the promotion of sustainable and high value-added investments, with the aim of creating jobs in Spain and strengthening local capacities via training and technology transfer. However, Article 13 of the new decree bars the organization of cross-border training, the dispatch of technical personnel abroad, and the provision of remote assistance related to technologies designated as restricted by the State. This includes technologies used in biotech, aerospace guidance systems, the processing of rare earths, the manufacture of lithium batteries for electric vehicles (EVs), and the algorithms integral to Artificial Intelligence.
From informal practice to regulatory strategy
The decree does not introduce completely novel policies but formalizes a set of practices that had been unevenly applied up to now. A very recent example was the April 27 action by Beijing to block the acquisition of ManusAI by Meta, signaling that Chinese companies will not evade State control simply by changing their corporate address. In a move often dubbed Singapore washing, this China-based AI startup had relocated its headquarters to Singapore before attempting the $2 billion sale. Article 13 will now regulate all strategically sensitive technology and know-how of Chinese origin, with the State maintaining controls regardless of the registered address.
Most crucial is not that the decree creates new rules, but that it consolidates under a single legal framework what had previously been addressed in multiple ways. Thus Chinese companies will no longer be treated as mere commercial actors but as part of an official institutional strategy. This demonstrates how China’s outward investment is shifting to prioritize quality over volume while protecting the country’s most strategic assets. Decree 837 is the legal instrument that formalizes that change of priority.
“The decree officially turns Chinese companies into part of an institutional strategy rather than commercial actors”
It could be said that China now aims to impose on its own overseas investors the same logic that has long governed foreign companies seeking access to its domestic market: no technology transfers, no deal. In the 1980s and 1990s, to attract capital as well as knowledge transfer, foreign entities had to enter into joint ventures with local partners to gain access to China.
The relevance for Spain
The past two years have seen a wave of Chinese investment in Spain, with projects including the CATL and Stellantis battery plant in Figueruelas, the Chery and Ebro EV assembly plant in Barcelona, the Envision AESC battery factory in Extremadura, and an announced project by SAIC Motors to establish its first EV facility in Europe in Galicia. All of these were framed as reindustrialization projects that would bring capital, jobs, and technological know-how to regions with limited industrial capacity. The Memorandum of Understanding on Exchange and Cooperation in the Field of Economic Development Policy — signed with China’s National Development and Reform Commission during Sánchez’s latest visit to Beijing — aims to fulfill those promises by promoting tech-transfer activities. Yolanda Díaz has also met with SAIC Motors and other investors to promote training courses adapted to the profiles required by Asian multinationals.
“While assembly is carried out in Spain, the technical knowledge that makes assembly possible remains in China”
The point is that the model underlying several of these projects runs counter to the new decree. The Figueruelas plant, for example, requires the arrival of approximately 2,200 Chinese workers to operate the technology for battery manufacture. While assembly takes place in Spain, the technical know-how that makes assembly possible remains in China. The details of many other announced projects are not yet public, but Article 13 suggests they will follow a similar pattern. If Chinese investments are prevented from including transfers of know-how linked to strategic technologies such as EV batteries, then related projects in Spain will face numerous restrictions.
The underlying logic
Decree 837 is structurally incompatible with the European Commission’s proposed Industrial Acceleration Act, known in English as the IAA, which seeks to raise the weight of manufacturing in the EU’s Gross Domestic Product through four channels: streamlining permits for industrial projects; imposing emissions limits in public procurement plus sectoral requirements for European participation; conditioning foreign investment in strategic sectors; and designating zones for industrial acceleration.
The Made in Europe aspect remains the IAA’s most controversial requirement — a protectionist reaction to China’s commercial and technological disruption in the market — and the Chinese government has spoken out against it. Specifically, the condition of 70% European participation in the automotive sector aims to curb dumping, given that Chinese EVs receive State subsidies that enable them to compete at substantially lower prices. Chinese investments in this sector currently arriving in Spain are seeking to settle inside European borders before the IAA takes effect. However, the operative model behind these investments does not presently add real value to Europe’s manufacturing industry, being based exclusively on final-product assembly, while every strategic phase is conducted in China. Decree 837 now legally protects that model by retaining technology and know-how on Chinese soil, even as the IAA and the memoranda signed by Sánchez aim for the attraction of genuine technology transfer.
