China lists ‘sensitive sectors’ as it tightens curbs on overseas investments
Real estate, hotels, cinema, entertainment, sports clubs, and private equity funds among foreign sectors that will face increased scrutiny
China’s top economic planner on Sunday released a full list of “sensitive” areas where it intends to restrict overseas investments, putting a specific curb on deals related to real estate, hotels, cinema, entertainment, sports clubs.
Weapons’ development, manufacturing and maintenance, multinational water resources exploitation, and news media were also included on the list, confirming previous draft rules unveiled in November. The tighter restrictions will also apply to private equity funds that have no investments in the “real economy”.
The list of restricted sectors will come into effect on March 1, said the National Development and Reform Commission (NDRC) in a statement late on Sunday.
Under existing regulations, Chinese companies are required to report any overseas deal in which their investment is more than US$300 million to the NDRC. If the investments are in sectors or countries deemed sensitive, they have to seek approval from the regulators.
The new list was published as China’s foreign exchange reserves rose for a 12th straight month in January on the back of a weakening US dollar and stricter capital controls.
Reserves grew US$21.5 billion in January to US$3.16 trillion, the highest since October 2016, according to recent figures from the People’s Bank of China.