In recent years, China has sought to tighten regulation of foreign nonprofit organizations and foundations operating or funding in China, including through a new Law on the Management of the Domestic Activities of Foreign Non-governmental Organizations in China, enacted in April 2016. This article analyzes the history of China’s regulation of foreign nonprofits and foundations, the effect of external and domestic events on China’s shifting policy climate, the emergence of security-based intellectuals and their role in policy on foreign nonprofits and foundations in China, the new policy framework and the new Overseas NGO Law enacted in 2016, and initial implementation of this new framework in China. These developments provide background to other aspects of nonprofit and philanthropic performance in China that are discussed in this special issue.