China told to save its overseas investments at risk from foreign protectionism and global recession

Former head of securities watchdog says China has worked to cope with rising challenges, but changes are not keeping pace with global developments

As countries move to avoid further reliance solely on Chinese supply, China itself is urged to upgrade bilateral investment agreements

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Xiao Gang, former president of China Securities Regulatory Commission, is now a senior researcher with the government-backed think tank China Finance 40 Forum. Photo: Xinhua

Published: 8:00pm, 21 Sep 2020Updated: 11:25pm, 21 Sep 2020

China should protect its massive overseas investment interests with more sophisticated and better coordination as protectionism by other nations has escalated and global industrial chains have been affected by the coronavirus pandemic, said Xiao Gang, a former head of the country’s securities watchdog.

Xiao, who is now a senior researcher with the government-backed think tank China Finance 40 Forum, said the global economic recession and stricter national security reviews by foreign governments posed risks to China’s overseas investment.

“The power play between emerging nations and developed countries in free trade and free investment has escalated. The unilateral economic sanctions by developed countries and national security scrutiny regimes have become blocks for outbound investment by developing countries,” Xiao said.

The tightening scrutiny on foreign investments led by developed countries, the rise in trade protectionism and disjointed steps in combating the coronaviru, and shoring up economies would further complicate China’s outbound investment, according to a videoconference speech delivered by Xiao at a forum in Xian in northwestern Shaanxi province last week. The transcript was released on Sunday.

In recent years, China has improved capacity to protect its overseas interests as its investments abroad face rising security challenges but Xiao – who led a report to propose a more sophisticated and coordinated protection framework – said not enough had been done to keep up with the latest global developments.