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在线翻译:
szdaily -> Business
Rules issued to curb ‘irrational’ overseas investment
    2017-August-21  08:53    Shenzhen Daily

THE State Council has formally laid down new rules on overseas investments, making explicit its de facto campaign against “irrational” acquisitions of assets in industries ranging from real estate to hotels and entertainment.

The government set out three categories — banned, restricted and encouraged — outlawing investments in gambling and sex industries, while backing companies to support the nation’s “Belt and Road” initiative, the State Council said in a statement Friday. Property, hotel, film, entertainment and sports investments will now be subject to restrictions, the statement said.

“Profound changes are taking place in international and domestic situations, and Chinese enterprises face not just relatively good opportunities but also various risks and challenges in overseas investments,” the State Council said.

China has embarked on a drive to reduce leverage in financial markets and snuff out systemic risks, while remaining vigilant for accelerated capital outflows that threaten to weaken the country’s currency.

Some of the country’s most aggressive dealmakers — Anbang Insurance Group, Fosun International, Dalian Wanda Group and HNA Group — have already been the target of government pressure to scale back their foreign activities.

“This is the State saying we want better say over where China’s resources are going abroad,” said Andrew Polk, co-founder of research firm Trivium China in Beijing.

In a separate statement, the National Development and Reform Commission (NDRC), the top economic planning body, criticized “irrational” overseas investment in some sectors, while encouraging projects linked to the Belt and Road initiative.

There have been problems with overseas investments, the NDRC said, adding that some companies made rash decisions and sustained losses.

“Some companies focused on property rather than the real economy, which, instead of boosting the domestic economy, triggered capital outflows and shook financial security,” it said. Some companies disregarded the environment, energy and safety regulations in target countries, which resulted in disputes and impaired China’s image, it said.

The People’s Bank of China imposed controls as the amount of money flowing out last year topped US$816 billion, according to data compiled by Bloomberg.

The banking regulator this year asked lenders to provide loan information on the country’s top deal-making companies, and is examining examples of acquisitions gone awry by those firms to assess potential risks to the financial sector, people familiar with the matter said.

China’s outbound investment slumped 44.3 percent in the first seven months from a year earlier.

“China wants its money to focus on specific sectors that can help boost long-term growth potential,” said Zhou Hao, a senior emerging-markets strategist at Commerzbank AG in Singapore. “The new policy also tries to close the loophole of suspicious capital outflows and possible money laundering.”

(SD-Agencies)

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