China sets new rules on overseas investment for its biggest deal makers
Revised system that comes into force in March aims to stimulate foreign deals while closing the door on ‘irrational’ capital outflows
New rules on outbound investment designed to close the loopholes some Chinese firms use to transfer capital out of the country will come into force in March.
In a directive released on Tuesday, the National Development and Reform Commission said that all foreign investment deals by Chinese firms, including those conducted by their overseas affiliates, must be reported through a new online, government-run information system.
Furthermore, all deals involving “sensitive” countries – those that no have diplomatic ties with China or are engaged in civil war – or sensitive industries – weapons manufacture and the media – will be subject to Beijing’s approval, the country’s top planning agency said.
The current regulations list telecommunications, land development and power grids as sensitive sectors.
In the case of non-sensitive deals, those valued at US$300 million or more must be registered with the NDRC, while those below that figure must be registered with local authorities, the statement said.