Chinese regulatory bodies are moving to curb the flow of U.S.-originated capital into certain technology firms, according to people briefed on the matter. The National Development and Reform Commission and other agencies have informed private companies that funding rounds backed by capital originating in the United States should not proceed unless Beijing explicitly approves them.
The guidance has been conveyed to a number of private technology groups. Among the startups reportedly receiving this instruction were Moonshot AI, which is said to be contemplating an initial public offering, and StepFun. The direction is not limited to smaller ventures: officials have applied similar controls to ByteDance, the owner of TikTok, advising that secondary share sales to U.S. investors should not be authorized without government consent.
Regulators described the objective of these measures as preventing U.S. investors from acquiring stakes in companies that operate in sectors Beijing regards as national security priorities. Reporting indicates that the recent acquisition by Meta Platforms Inc. - a $2 billion purchase of the startup Manus - prompted scrutiny by Chinese authorities for potentially constituting illegal foreign investment. That deal also intensified criticism within China that domestically developed AI technology had been lost to a major geopolitical rival.
The push to limit U.S. capital access is part of a broader pattern of regulatory actions aimed at tightening control over cross-border investment channels. Previously, Chinese authorities restricted certain types of Chinese businesses incorporated overseas from pursuing listings in Hong Kong, a move that was described as potentially jeopardizing a long-standing conduit to foreign capital for some Chinese firms.
Officials communicating the new guidance appear focused on ensuring that transactions involving equity stakes or secondary sales in sensitive technology areas receive explicit government sign-off before completion. The scope of firms affected, the precise mechanics of the approval process, and how broadly the restrictions will be enforced were not detailed by the sources.
The reported measures represent a significant policy stance toward foreign investment in strategic technology sectors, with potential implications for capital-raising options available to Chinese tech companies and for the structure of future cross-border transactions.