China issues draft guidelines on overseas investment amid crackdown on deals
Beijing has restricted deals abroad as it tries to control the flow of cash and assets out of China
China’s state planner issued draft guidelines on Friday for its companies investing overseas, streamlining approval processes for deals while raising oversight for projects in sensitive sectors and countries, the government said.
After years of rapid growth, China’s outbound investment has slumped so far in 2017 as the authorities crack down on “irrational” overseas deals which are suspected of being used to bypass capital controls and move money offshore, pressuring the yuan currency.
The draft regulations, released to the public to solicit feedback until December 3, aim to improve oversight, safeguard national security and increase support, according to a post on the website of the National Development and Reform Commission.
Some administrative hurdles, such as a rule requiring that Chinese companies investing over US$300 million overseas seek approval from the state planner, would be reduced or removed under the new rules, the post said.
At the same time, the new rules would also increase oversight on investments by overseas subsidiaries of Chinese companies, as well as for investments in sensitive sectors and countries, it said.
Sensitive projects listed in the rules include those in countries that are at war, that do not have diplomatic ties with China or where investment is restricted by China’s commitments to international treaties, resolutions or requirements.