Abstract: China has become an influential source of foreign direct investment in the last decade. The growth coincides with a series of regulatory reforms governing China's outbound direct investment (CODI). Current analyses of CODI and its regulatory environment are largely missing in the literature on China's political economy, however. The paper studies the new regulation of CODI and explains distortion and disjuncture in CODI, particularly the under-representation of private companies, the market-defying geographic and sector concentration, and generally low profitability of China's outbound investment. The paper uses statistics published by Chinese government and international organizations, as well as a number of interviews at private companies.