Hong Kong sees silver lining in tighter rules for mainland China’s outbound investments
Clampdown on ‘irrational’ capital flows could be a boon for Hong Kong businesses assisting with approved investments overseas, analysts say
Beijing’s new rules on “irrational” outbound investment from mainland China could spell fresh benefits for Hong Kong, possibly driving down land prices and injecting funds into the city’s technology sector and infrastructure, analysts say.
The Hong Kong government is setting its sights on the opportunities offered by the new regulations, with the Commerce and Economic Development Bureau saying the city could serve as an “effective platform” to help mainland companies with legitimate investments abroad.
The comments came after the State Council, China’s cabinet, issued a directive last week formally setting boundaries for outbound capital as the authorities attempt to curb what they have previously called “irrational” investments.
Beijing has set out three categories – banned, restricted and encouraged – as it seeks to “push ahead reasonable and orderly outbound investments”, the directive stated.
Among banned investments are those in gambling and the sex industry. Restricted ones requiring regulatory approval include property, hotels, cinemas and companies setting up overseas equity funds or investment vehicles not tied to specific projects.
But the authorities are encouraging companies to invest in the hi-tech sector, research, logistics and infrastructure projects that facilitate the Belt and Road Initiative – the country’s go-global trade strategy.