8.5 Trillion Yuan of Foreign Capital Abroad "Switching Stewards": A Systemic Leap from "Moving Fast" to "Moving Steadily"

Written by: RWA Research Institute

In early April 2026, Dubai, the United Arab Emirates. On a construction site for a luxury resort just 5 kilometers from the Burj Khalifa, the construction team of Energy Iron Man Company is packing up. This listed company’s first overseas project announced its withdrawal less than two years after signing; projects worth more than 5.5 billion yuan were transferred to another central state-owned enterprise to take over. Against the backdrop of intertwined factors—geopolitical conflicts, a cooling local real estate market, and four consecutive years of losses suffered by the company itself—this overseas debut draws to a close.

Thousands of miles away in Ecuador. The Mirado Copper Mine Phase II project, which China Railway Construction Copper Crown, a subsidiary of Tongling Nonferrous Holdings, has invested heavily in, has clearly already completed system interlocking test run and heavy-load trial run, with all indicators fully meeting requirements. Yet due to political instability in Ecuador, a presidential change, and “leadership at the competent authorities changing for several times,” the key “Mining Contract” has still not been signed. According to a report by Securities Daily on April 7, 2026, Tongling Nonferrous said on an interactive platform that the company is actively advancing relevant work for signing the Mirado Copper Mine Phase II project’s “Mining Contract,” and will continue to closely monitor developments thereafter. A modern mine that had been efficiently built in 22 months ends up stuck in a deadlock over commencement of production, all because of “a single paper contract.”

These two events reflect a reality that cannot be avoided: when the overseas footprint of central state-owned enterprises has expanded to more than 180 countries and regions worldwide, and operational projects exceed 8,000, the old regulatory framework is undergoing a deep stress test.

While these events are still unfolding—on April 8, 2026, according to Xinhua News Agency—the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council established the Office of Foreign Investment Affairs. According to the information shown on its official website, the Office of Foreign Investment Affairs’ main responsibilities are to guide the international operation of the enterprises it supervises and to optimize overseas asset layout, as well as guide structural adjustments; to undertake relevant work on overseas asset supervision for the supervised enterprises; to strengthen risk prevention and resolution in areas such as overseas investment and operations; and to undertake relevant work on handling overseas emergencies and crises.

Screenshot of the SASAC website

I. From “divide and rule” to “centralized coordination”: a long-delayed institutional response

The appearance of the new agency is not accidental.

According to a report published by Sina Finance on April 9, 2026, citing the latest statistics as understood by the Ministry of Commerce, the State Administration of Foreign Exchange, and SASAC: by the end of 2025, the total overseas assets of central enterprises alone had already exceeded 8.5 trillion yuan. This huge pool of “assets at home” is distributed across more than 180 countries worldwide, involving energy, minerals, infrastructure, and high-tech R&D centers. What does 8.5 trillion mean? It is nearly 7% of China’s national GDP in 2024 and equivalent to the annual output of the 16th largest economy in the world. This massive pool of “assets at home” accounts for about 18% of central enterprises’ total assets. In 2024, the total overseas tax payment amount by central enterprises exceeded 220 billion yuan, driving domestic equipment exports of more than 300 billion yuan.

The larger the scale, the larger the risk exposure.

However, before the new agency was established, the supervision of these massive overseas assets followed a “multi-headed management” pattern. According to a report released by Xinhua Finance on April 9, 2026 titled “Key Moves in State-owned Asset Supervision: How Does the Newly Established Office of Foreign Investment Affairs Help Central Enterprises ‘Go Steadily and Go Far’?”: before a dedicated Office of Foreign Investment Affairs was set up, the core of overseas asset supervision for central enterprises involved three offices and bureaus within SASAC. The Planning and Development Bureau was responsible for approving the “entry” of overseas investment; the Financial Supervision Bureau was responsible for asset ownership registration and performance assessments on preserving and increasing value; and the General Bureau and the Bureau of Supervision and Accountability were responsible for compliance oversight and post-incident accountability. The three departments each managed a segment—like a relay team: someone managed at the start, someone watched during handovers, and someone was also responsible in the sprinting stage, but the long period of running in between became a vision blind spot.

At present, as central enterprises’ “going global” business develops quickly, state-owned assets cover more than 100 countries and regions, but overseas foreign asset supervision is dispersed across multiple offices and bureaus. This creates problems such as unclear responsibilities and insufficient coordination, making it difficult to deal with complex risks like geopolitical conflicts and international compliance. In the past, it was “everyone managed a segment,” with heavy emphasis on front-end approvals and light emphasis on mid- and back-end operations and risk control. By setting up specialized offices and bureaus, integrated coverage can be achieved—from planning and layout, investment decision-making, and asset operations to risk prevention, supervision and accountability, and crisis handling—thus filling the regulatory vacuum for overseas assets.

The phrase “regulatory vacuum” is especially heavy in a cross-border context. Because the overseas assets face not a single-dimensional test, but a complex matrix formed jointly by geopolitical factors, legal differences, cultural barriers, and exchange-rate volatility.

Political risks faced by actual business projects, speculative risks from financial derivatives, risks arising from vicious competition and decision-making errors, risks of corruption and benefit transfer, and risks related to operations and compliance. When these five layers of risks are compounded, the previous regulatory model dispersed across multiple departments could hardly form a joint force. Establishing a specialized institution to provide overall coordination and guidance, risk early warning, and crisis handling can solve problems more effectively.

It is this kind of reality that forces the need and gives rise to the Office of Foreign Investment Affairs.

According to information on the official website, the Director of the Office of Foreign Investment Affairs is Zhu Kai. It has four offices: the Office of Internationalized Operation, the Office of Risk Prevention, the Office of Supervision and Governance, and the Office of Emergency Management. The arrangement of these four offices is by no means arbitrary. Instead, it forms a clear logical chain—starting from strategic layout (Office of Internationalized Operation), to process monitoring (Office of Risk Prevention), to compliance accountability (Office of Supervision and Governance), and then to crisis back-up (Office of Emergency Management). Together, it precisely constitutes a complete closed loop covering pre-, during-, and post-events.

From this, we can see the specific responsibilities. First, it is to guide central enterprises’ internationalized operation and optimize overseas asset layout and structural adjustments. Second, it is to safeguard security by weaving a three-dimensional, efficient and effective prevention network of “pre-warning before events, control during events, and trace-back after events.” There are fundamental objective differences between foreign asset management and domestic supervision—because the legal and regulatory environments differ between domestic and overseas; corporate governance and ownership structures are more complex. With the extension of geographic distance and information transmission distance, plus the attenuation of the management scope and effectiveness, traditional domestic supervision models are more prone to malfunction.

The logic of supervision has changed. It has moved from scattered oversight to centralized management; from “managing a segment” to “managing the entire process”; and from “fixing after problems occur” to “seeing them before problems arise.”

II. From Dubai to Ecuador: going overseas has never been smooth sailing

Institutional upgrades are never designed out of thin air. Behind them are lessons from specific projects, and bills paid with real money.

According to a report by Daily Economic News on April 7, 2026, Energy Iron Man (SZ 300197), the company’s first overseas project—the Dubai Maigeketurah Resort project—was declared to be terminated, and the project was transferred to CITIC Construction UAE. The project originally planned total investment of over 5.5 billion yuan, but it withdrew due to geopolitical conflicts, pressure on company operations, and pressure from the local real estate market. The contract amount was close to four times Energy Iron Man’s audited operating revenue for 2023 (14.18 billion yuan), and the company had once placed high hopes on it to “enhance internationalization and corporate visibility.” But according to a news report compiled from materials from the Economic and Commercial Office of the Chinese Consulate-General in Dubai on April 2026, the real estate market in Dubai, mainly led by off-plan housing, has cooled noticeably, and Dubai’s real estate transaction volume in March fell 21% month-on-month. Combined with the company’s financial situation of consecutive losses for four years from 2021 to 2024, this ultimately led the “first overseas project” to exit midway. This case almost condenses all typical risks of overseas investment: drastic changes in the external environment, misalignment of internal capabilities, and insufficient early-stage assessment.

Going overseas is not a dinner party. Especially when your ship has already entered entirely different waters, yet you are still using navigation charts meant for inland rivers.

The experience of Tongling Nonferrous in Ecuador reveals even more profoundly the destructive power of “soft risks.” The Mirado Copper Mine Phase II project is highly efficient during the construction stage—completed in 22 months, with efficiency that is quite competitive among similar projects abroad. But according to a report by Securities Times on January 4, 2026, due to frequent changes in the political situation and personnel in Ecuador, the leadership of the competent authorities changed multiple times, which affected the progress of signing the “Mining Contract.” Official commencement of production can only be carried out after the “Mining Contract” is signed. A mine that has already been built cannot move forward because of a break in policy continuity, leaving it stuck in the approval process. In the world of cross-border investment, even the fastest construction speed cannot beat the slowest political decision-making. The uncertainty brought by this “nonlinear shock in political developments” is precisely the kind of risk that is most difficult to predict and respond to under a dispersed regulatory model.

If the predicaments of the Dubai project and the Ecuador mine fall within the category of “visible” risks, then internal competition among central enterprises is a more covert “self-inflicted friction type” risk. Multiple central enterprises have shown internal competition in overseas infrastructure and energy sectors, compressing profit margins. In non-controlling projects, financing difficulties and insufficient trust are more prominent. Some central enterprises also terminated acquisitions due to failed cross-border mergers and acquisitions. Behind each story is the price paid for lacking top-level overall coordination.

As the asset scale of state-owned enterprises overseas continues to grow, and international geopolitics becomes increasingly complex, the risk of overseas asset losses for state-owned assets is rising sharply.

III. A strategic turning point from “being able to keep it under control” to “doing well in it”

If we widen our perspective away from individual projects and institutional setups, we will find that the establishment of the Office of Foreign Investment Affairs is not only a response to risks in the present, but also a deep iteration of governance concepts.

On November 28, 2025, SASAC of the State Council issued the “Implementation Measures for Accountability for Violations of Operational Investments by Central Enterprises” (SASAC Order No. 46), effective from January 1, 2026. It clarifies 98 circumstances of accountability, covering 13 areas including group-level management and risk management and overseas operation and investment. This “institutional prelude” paves the way for the debut of the Office of Foreign Investment Affairs: accountability is “punishment after the fact,” while a specialized institution provides organizational support for “prevention before the fact” and “control during the fact.”

Accountability is “settling the账 after problems occur,” while supervision is “keeping watch all the way.”

Overseas asset supervision has never been as simple as “preventing losses.” Every move by central enterprises overseas represents not only the enterprises themselves, but also a calling card of China’s manufacturing, China’s standards, and China’s governance capabilities. In 2024, overseas projects of central enterprises drove domestic equipment exports of more than 300 billion yuan and created more than 500,000 indirect jobs. Behind these figures lies the reality of deep coupling between China’s economy and the global economy.

Chinese companies’ going overseas is experiencing a three-step leap—from “exporting products” to “exporting brands and management” and then to “exporting governance structures and standards.” This means the new institution must not only serve as a “gatekeeper,” but also become a “chief of staff”—in addition to risk prevention, it must guide enterprises to optimize their layout, focus on their main businesses, and improve the quality of their international operations.

From a historical perspective, the establishment of the Office of Foreign Investment Affairs also signals a correction of governance ideas. Looking back at the 2015 to 2016 “outward investment boom” period, some enterprises, under the name of “overseas acquisitions,” in fact engaged in “asset transfers,” which triggered heightened vigilance at the top levels. In 2017, the State Council issued the “Guiding Opinions on Further Guiding and Regulating the Direction of Overseas Investment,” clearly restricting overseas investment in areas such as real estate, hotels, cinemas, entertainment, and sports clubs. Pan Gongsheng, then Vice Governor of the People’s Bank of China, pointed out sharply and incisively: “Many enterprises already have a high debt ratio in China. Then they borrow a large sum of money to acquire overseas assets. Some others, under the packaging of direct investment, are actually transferring assets.”

After that rectification, China’s overseas investment moved from a “quantitative explosion” to “quality consolidation.” And now, the establishment of the Office of Foreign Investment Affairs—after this consolidation—is a decisive step toward “systematic governance.”

IV. Build a “breakwater” amid crashing waves and roaring storms

By now, we can draw a complete outline of the strategic positioning of the Office of Foreign Investment Affairs:

From the functional perspective, it is a whole-chain closed-loop system ranging from “guidance on internationalized operation” to “optimization of asset layout,” from “risk prevention and resolution” to “handling of emergencies,”. The setup of the four offices corresponds exactly to four key nodes of an enterprise’s going overseas: before departure, see the road clearly; while traveling, see the pits clearly; if you go off course, someone will correct you; if you fall, someone will help you up.

From the governance perspective, it is an organizational innovation from “decentralized supervision” to “centralized management,” ending the ambiguous zone of “someone supervises, but no one is really in charge all the way,” and giving overseas state-owned assets supervision and management a clear “first responsible person.”

From the strategic perspective, it marks that the internationalization process of Chinese enterprises is comprehensively shifting from “going fast” to “going steady.” During the “13th Five-Year Plan” period, the overseas operating revenue of central enterprises exceeded 24 trillion yuan, and the rate of return on overseas investment was 6.7%. But in the new stage, more important than the growth of figures is the safety and sustainability behind the numbers. As international geopolitics becomes increasingly complex and unilateralism and protectionism rise, only an institutionalized risk prevention and control system can ensure that the overseas voyage can withstand storms.

Going fast is capability; going steady is real skill.

The challenges facing the new institution are also worth paying close attention to. How to balance “strict supervision” with “market flexibility”? How to enhance oversight without adding approval burdens to enterprises’ overseas decision-making? How to respond to emergencies in a way that is both fast and accurate? These questions have no ready-made answers and need to be continuously calibrated in practice. But at least, the direction is already clear.

On April 8, 2026, the update on SASAC’s official website may appear to be just an ordinary institutional adjustment. Yet behind it lies the security of 8.5 trillion yuan of overseas assets, the protection of dozens of thousands of overseas employees, and the institutional foundation for Chinese enterprises to continue climbing higher in global value chains. From “divide and rule” to “centralized coordination,” from “post-incident accountability” to “whole-process supervision,” from “being able to keep it under control” to “doing well in it”—this series of keywords sketches a clear and visible track of institutional evolution. And that is precisely the true weight of the establishment of the Office of Foreign Investment Affairs.

The bigger the storms, the stronger the embankment must be.

(Note: Data in this article are current as of April 2026. The total overseas assets of 8.5 trillion yuan for central enterprises come from a report published by Sina Finance on April 9, 2026, citing the latest statistical approach from the Ministry of Commerce, the State Administration of Foreign Exchange, and SASAC. Information on the establishment of the agencies comes from a report by Xinhua News Agency on April 8, 2026. Expert viewpoints come from authoritative channels such as Xinhua Finance, First Financial, Daily Economic News, Securities Daily, and Beijing News Shell Finance, where published information has been made publicly available.)