In his public statements during his four trips to China in the last four years, President Pedro Sánchez called for the growing investment presence of Chinese technology companies in Spain not to be limited to building factories, acquiring assets, or investing capital, but to be accompanied by something even more valuable in the long term: knowledge transfer, technological cooperation, and joint development of industrial capabilities.
The socialist leader emphasized this particularly during his 2025 visit and reiterated it in April of this year. However, while Spain and other European countries demand a more balanced economic relationship and greater integration into Chinese technological value chains, Beijing is moving in the exact opposite direction.
The latest example comes with the publication of new regulations that significantly tighten control over Chinese investments abroad and protect the export of technologies considered strategic. The rules, approved by the State Council and announced this week, constitute the strongest legal framework to date to prevent data, intellectual property, or talent linked to sensitive sectors from crossing Chinese borders without undergoing a stricter filter by state supervision.
For years, several European governments have called for broader access to the Chinese market, fewer regulatory restrictions, and smoother industrial cooperation. Spain, which has been strengthening its relationship with the Xi Jinping regime, has been one of the countries that has insisted the most on this idea. Before Sánchez's last trip to Beijing, Bloomberg pointed out that one of the Spanish government's objectives was precisely to ensure that Chinese investments generated skilled employment, the participation of Spanish companies in technological projects, and effective knowledge transfer.
However, Beijing's strategic logic is heading in a different direction, especially now that technological rivalry with the United States has turned innovation into a matter of national security. While China's priority for decades was to attract foreign technology to accelerate its economic development, the current goal is to prevent the advantages accumulated by the Asian superpower in emerging sectors - such as electric vehicles or advanced computing - from benefiting foreign competitors.
Just look at some of the major Chinese investments in Spain to understand which way the wind is blowing. Industrial projects related to electric vehicles in Aragon or in Galicia mainly respond to Chinese companies' need to produce within the European market and bypass trade barriers, rather than a technology transfer strategy. In Zaragoza, even the plan for the CATL battery gigafactory alongside Stellantis involves a significant portion of specialized staff coming directly from China. This philosophy aligns with Beijing's growing obsession with maintaining control over critical knowledge.
Beijing's new rules grant authorities broad powers to "review foreign investments that may affect national security." They also allow for "ordering the suspension of already executed operations and demanding the sale of acquired stakes or assets abroad if they are deemed to violate the country's strategic interests." Indirect transfers through "cross-border deployment of technical personnel, consulting services, training programs, and other agreements" are prohibited.
Companies that violate the provisions could face penalties of up to 1% of the transaction value. The regulations will come into effect on July 1. "Such measures would be protective and defensive in nature and will not affect normal market business activities," stated the official communication released this week.
One of the most relevant aspects directly affects technology transfer. The text prohibits the unauthorized transmission of certain technologies and data. In practice, this means that Chinese engineers, researchers, and experts may encounter increasing obstacles to working on international projects if they involve sharing sensitive knowledge.
This measure comes at a particularly delicate moment for the artificial intelligence industry, which has become the main battleground for competition between Beijing and the West, primarily with Washington. The Asian giant has already shown how far it is willing to go to protect its technological ecosystem. The most recent example was in April when it ordered the reversal of the acquisition of the Chinese AI startup Manus by Meta.
The deal was valued at $2.5 billion, and Meta had completed the purchase at the end of last year. However, Chinese regulators initiated a review that ultimately led to the cancellation of the transaction.
The new regulations formally institutionalize this move: any transaction involving the transfer of strategic technological assets can be examined and blocked if it is deemed to harm national interests.
The stated goal is to prevent foreign companies, like Meta, from accessing technologies developed within China.
The new guidelines also require the country's leading technology companies to automatically undergo regulatory supervision before receiving any foreign investment. Additionally, the regulations set up a defensive barrier against foreign companies that "harm Chinese interests or interfere with the country's investments." Entities classified as such will face sanctions and investment blocks.
China sends the message that its capital's doors remain open, but it is not willing to share what it considers the basis of its current and future competitive advantage. This frustrates the aspirations of countries like Spain, which hoped that Chinese investment would contribute to local industrial development through joint projects and technology transfer.