Exclusive | China’s foreign investment ‘shopping spree’ over as Beijing moves to slash capital outflow
Payments of more than US$5 million will have to be cleared by central authorities
Beijing is embarking on a massive policy shift designed to stem capital flight by curbing outbound investment, sources say.
Tighter control of overseas investment is likely to put an end to a trophy-asset shopping spree by well-connected companies such as Anbang Insurance and Dalian Wanda, with Beijing ready to cut the supply of foreign exchange for such deals.
Shanghai’s municipal foreign exchange authority had told bank managers in the city that all overseas payments under the capital account of more than US$5 million would have to be submitted to Beijing for special clearance before proceeding, according to the sources.
They added that while the move did not necessarily mean all such deals would be vetoed, the regulatory procedures that would have to be navigated before completing them would take much longer.
A separate document seen by the South China Morning Post said to be the minutes of a central bank meeting on cross-border capital controls, said that from now until September of next year, Beijing would ban: deals involving investment of more than US$10 billion; mergers and acquisitions valued at more than US$1 billion outside a Chinese investor’s core business; and foreign real estate deals by state-owned enterprises involving more than US$1 billion.