China to curb ‘irrational’ overseas investment by domestic firms in ‘Belt and Road’ projects
Government says it will provide better guidance on risks to investors to prevent ‘vicious’ competition, corruption
China will strengthen rules to defuse risks for domestic companies investing abroad and curb “irrational” overseas investment in its “Belt and Road Initiative”, the state planner said on Friday.
The National Development and Reform Commission said in an online statement it would provide better guidance on risks to companies investing overseas to prevent “vicious” competition and corruption.
“This is to promote the healthy and orderly development of foreign economic and trade cooperation,” it said in the statement.
Mergers and acquisitions by Chinese companies in countries linked to the “Belt and Road Initiative” have been growing at a rapid rate, even as Beijing takes aim at China’s acquisitive conglomerates to restrict capital outflows.
Chinese acquisitions in the 68 countries officially associated with President Xi Jinping’s signature foreign policy totalled US$33 billion as of Monday, surpassing the US$31 billion for all of 2016, according to Thomson Reuters data.
Unveiled in 2013, the “Belt and Road” project aims to boost trade and investment along two routes – one along the ancient “Silk Road”, connecting China by land and sea through Central Asia and the Middle East to Europe, and the second linking it to Southeast Asia and Africa.
In the statement, the commission lauded the plan, citing projects such as a high-speed railway in Indonesia and a crude oil pipeline between southwest China and Myanmar as examples that showed how the initiative was gaining pace.
Up to the end of last year, Chinese companies had invested more than US$18.5 billion to build economic and trade cooperation zones in 20 countries along the “Belt and Road” routes, it said.