China has enacted sweeping new entry-exit rules giving authorities the power to prevent engineers, founders, and specialists from leaving the country if their expertise threatens what Beijing defines as “industrial and technological security.”
The restrictions specifically target professionals working in batteries, rare earths, and artificial intelligence, marking a significant escalation in China’s effort to keep its most valuable human capital at home.
Henry Gao, a law professor at Singapore Management University, says the combined measures “offer a rare glimpse into the true state of China’s economy.”
Gao told DW that the curbs suggest Beijing is “deeply concerned about economic weakness and substantial capital outflows,” and that authorities are determined to stop “entrepreneurs and skilled personnel from leaving the country.”
China’s domestic economy has been under considerable pressure, with a prolonged property crash severely weakening consumer spending even as export demand, particularly for high-tech goods, remains relatively strong.
Bank lending fell to a record low over the summer of 2025, and new car sales dropped nearly a quarter year-on-year in August, underscoring the fragility of internal demand.
The most prominent recent case involves Manus, an AI startup founded by two Chinese nationals in Beijing, which relocated its headquarters to Singapore partly to sidestep US investment restrictions and access global markets.
When Meta attempted to acquire Manus for $2 billion last December, Beijing blocked the deal and barred the firm’s two founders from leaving the country, illustrating how far authorities are willing to go to retain strategic assets.
Bloomberg Intelligence estimated that roughly $1 trillion in Chinese wealth exited the country last year, the largest volume of outflows since records began in 2006, prompting authorities to crack down on informal channels used to circumvent the official $50,000 annual foreign-exchange quota for households.
Alicia Garcia-Herrero, chief economist for Asia-Pacific at French investment bank Natixis, explained that Beijing “haven’t changed the $50,000 quota,” but are “now squeezing the people and agents that money usually travels with.”
Garcia-Herrero argued that restricting the movement of skilled workers will ultimately prove more damaging than tightening capital flows, telling DW: “You cannot easily replace a process engineer who cannot board a plane — or who will not take an overseas job because of an indefinite ban.”
Bloomberg reported that Chinese authorities have required top AI researchers, founders, and executives at firms including Alibaba and DeepSeek to obtain government approval before traveling abroad, while some DeepSeek staff were asked to surrender their passports, according to tech news site The Information.
International law firms including DLA Piper have advised companies to keep visa filings “truthful” and “complete,” warning that discrepancies between paperwork and actual activities in China could result in entry bans of up to five years.
The US State Department issued an updated travel advisory this month warning Americans to “exercise increased caution in mainland China” due to the use of exit bans “without a fair and transparent process under the law, and the risk of unjust arrest or detention.”
Gao cautioned that the new controls risk being counterproductive, warning that over time they “could further erode confidence, accelerate capital flight and deepen the very economic problems the measures are intended to contain.”
