China’s top economic planning agency has publicly denied accusations that Beijing is pressuring domestic technology firms to reject foreign investment, pushing back against growing international concern that the country is erecting new barriers around its rapidly expanding artificial intelligence sector.
The statement from the National Development and Reform Commission, China’s powerful state planner, comes at a sensitive moment in the escalating technology rivalry between China and the United States, where artificial intelligence has emerged as the newest and perhaps most consequential battleground.
Speaking during a press briefing on Friday, NDRC spokesperson Li Chao insisted that the Chinese government has never imposed a blanket requirement preventing local technology companies from accepting overseas capital.
“We have never required Chinese technology companies not to accept foreign investment,” Li said, responding directly to reports that regulators were discouraging Chinese startups from taking US funding.
At the same time, however, Li emphasized that all foreign investments must comply with Chinese laws and regulations and must not threaten China’s national security or strategic interests. The caveat underscored the increasingly delicate balance Beijing is attempting to strike: preserving access to international capital while tightening state oversight over industries viewed as critical to future geopolitical competition.
The comments followed reports published in April by Bloomberg News alleging that the NDRC and other Chinese regulators had instructed several private technology firms, including leading artificial intelligence startups, to avoid accepting US investment during fundraising rounds unless explicit government approval had been granted.
According to the report, the guidance reflected growing anxiety within Beijing about foreign influence over strategically important technologies, particularly AI systems capable of military, surveillance and cybersecurity applications.
The controversy intensified after Chinese authorities reportedly ordered US technology giant Meta to unwind its acquisition of Chinese AI startup Manus in April, a move that shocked venture capital circles and raised fresh questions about the future of cross-border investment in advanced technologies.
The forced reversal sent ripples through both Chinese startup ecosystems and foreign investor communities, many of which had viewed China’s AI sector as one of the world’s most dynamic destinations for technological innovation and venture funding.
The decision also highlighted how artificial intelligence is no longer being treated solely as a commercial opportunity. Instead, governments increasingly view the technology as a strategic asset with profound implications for military power, economic influence and national security.
Both Washington and Beijing have accelerated efforts to secure leadership in frontier technologies ranging from advanced semiconductors to generative AI systems and autonomous robotics. The race has transformed what was once a relatively open global technology market into a fragmented and highly politicized environment shaped by export controls, investment restrictions and national security reviews.
For the United States, concerns center on fears that Chinese advances in AI could strengthen Beijing’s military modernization efforts, enhance surveillance capabilities and provide tools for sophisticated cyber operations. American policymakers have repeatedly argued that unrestricted technological cooperation with China could undermine long-term US security interests.
China, meanwhile, sees many US restrictions as an effort to slow its rise and preserve American technological dominance. Chinese officials have accused Washington of attempting to block the country’s legitimate right to develop advanced industries and compete globally in strategic sectors.
The clash has placed multinational investors and technology companies in an increasingly difficult position. Venture capital firms that once aggressively pursued opportunities in Chinese startups now face growing uncertainty over whether future deals could become entangled in geopolitical disputes or regulatory intervention.
The Manus case appears to have amplified those fears. While details surrounding the acquisition and subsequent reversal remain limited, the episode reinforced perceptions that Chinese regulators are prepared to intervene forcefully when foreign ownership intersects with sensitive technologies.
At the same time, Beijing remains eager to avoid the impression that China is closing itself off entirely to global investment. Chinese leaders have repeatedly emphasized the importance of maintaining foreign business confidence at a time when the country faces slowing economic growth, weak consumer sentiment and rising pressure from external trade restrictions.
Li’s remarks therefore appeared carefully calibrated to reassure international investors without weakening the government’s authority to scrutinize transactions deemed strategically sensitive.
The tension reflects a broader global shift in how governments regulate technology industries. Across both developed and emerging economies, sectors tied to AI, semiconductors, quantum computing and telecommunications are increasingly treated not merely as economic drivers but as pillars of national sovereignty.
In the United States, policymakers have imposed sweeping export restrictions designed to limit China’s access to advanced semiconductor technology and high-end AI chips. Chinese companies have also faced tighter scrutiny over listings, acquisitions and investments linked to American markets.
Meanwhile, China has expanded its own regulatory mechanisms governing data security, algorithmic systems and foreign participation in sensitive sectors. Authorities have repeatedly stressed that technological self-reliance is now a national priority amid worsening geopolitical uncertainty.
Artificial intelligence sits at the center of that contest. Experts warn that AI’s ability to accelerate weapons development, automate cyberattacks and process massive amounts of intelligence data gives it enormous strategic significance beyond civilian commercial uses.
The technology’s rapid evolution has also raised concerns about the potential concentration of power among governments and corporations capable of controlling the world’s most advanced AI infrastructure.
For startups operating in the middle of this geopolitical confrontation, the environment is becoming more complex and unpredictable. Chinese firms continue to attract significant domestic funding and state support, but restrictions on foreign investment may narrow access to global capital networks and international partnerships that once fueled innovation.
