Chinese regulators step in to calm market jitters over crackdown of overseas asset acquisitions

Two of China’s financial regulators have stepped in to calm market jitters about the government’s crackdown on overseas deals, denying reports that they would further discourage and scrutinise the overseas acquisitions by several of the country’s biggest asset buyers.

The China Insurance Regulatory Commission (CIRC) denied Bloomberg’s report that it had pressed Anbang Group to dispose of its offshore assets including New York’s landmark Waldorf Astoria hotel to repatriate the sales proceeds. There was “no related demand, plan or arrangement” to do so, the regulator said during a Thursday press briefing in Beijing.

A day earlier, the State Administration of Foreign Exchange (SAFE) chimed in to say that it actively supports banks and companies engaged in “real and compliant” businesses to use their onshore assets as collateral for offshore loans, rebutting Bloomberg’s Tuesday report that quoted unnamed sources saying SAFE was scrutinising the borrowing practice.

The statements, coming on the heels of putting several of the Chinese asset buyers -- Anbang, Dalian Wanda Group, Fosun Group and HNA Group -- under the spotlight for their profligate deal making and record-setting acquisitions, is sending mixed signals.

“It’s clear the authorities don’t want people to panic,” said Brock Silvers, managing director of Kaiyuan Capital, an investment advisory in Shanghai. “They also need to avoid spoiling the market for companies like Anbang” and not be seen to be making demands or requests for them to exit from the overseas market, and “to remain rational to ensure good pricing,” he said.