FATF Status

China is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in China was undertaken in 2022. According to that Evaluation, China was deemed Compliant for 9 and Largely Compliant for 22 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

Since 2012, China has implemented a significant anti-corruption campaign, with the National Supervisory Commission-Central Commission for Discipline Inspection (NSC-CCDI) expanding its investigations to include a wide range of officials and state-owned enterprises. Despite the government's efforts, including stricter penalties for corruption and public participation in reporting, corruption remains pervasive, impacting the business environment and leading to practices like bribery and political interference. Companies operating in China face high risks related to corruption, and while there are laws against corrupt practices, enforcement is often inconsistent.

In 2023, China's economy faced challenges as inbound foreign direct investment (FDI) fell by 13.7% to $163 billion, attributed to a slower-than-expected recovery from COVID-19 and various regulatory and geopolitical factors affecting investor confidence. Despite being the fourth-largest FDI destination globally, the country remains highly restrictive, ranking 11th on the OECD FDI restrictiveness index, with significant barriers including foreign ownership caps and joint venture requirements in key sectors. The economic relationship with Russia has also raised concerns among investors, as trade and investment ties deepen amid ongoing geopolitical tensions.

In 2023, China's Foreign Direct Investment (FDI) fell to $163 billion, marking a 13.7% decline from the previous year, largely due to a slower economic recovery post-COVID-19 and various investor concerns, including regulatory unpredictability and geopolitical tensions. The country ranks as the 11th most restrictive for FDI according to the OECD, with significant barriers such as foreign ownership caps and joint venture requirements in key sectors. Despite these challenges, the Chinese government has made efforts to improve the foreign investment environment, including extending tax holidays for foreign investors until 2027.