CHINA issued regulatory rules on outbound investments by centrally controlled State firms, the State asset regulator said yesterday, the latest move by the Chinese Government to tighten controls on money moving out of the country and stabilize a faltering yuan.
The State-owned Assets Supervision and Administration Commission (SASAC) said it would step up supervision on outbound investments, two documents published on its website showed.
The regulator also said it would establish a negative list of investment projects that centrally controlled State-owned enterprices (SOEs) would not be allowed to invest in, according to two statements published on the SASAC website. It was not clear if local government firms were excluded from the new rules.
The SASAC did not specify which industries would be included on the negative list. It also said firms must strengthen risk management and ensure the safety of their overseas assets. Companies’ annual investment plans must be submitted to the SASAC by March 10.
China’s outbound investment hit US$170.1 billion in 2016, up 44.1 percent from 2015, China’s Commerce Ministry said Monday. Of that total, overseas acquisitions and mergers by Chinese firms stood at US$107.2 billion in 2016.
Anxiety in markets has deepened in recent months as capital outflows picked up pace, forcing authorities to defend the currency and pushing foreign exchange reserves down to US$3.011 trillion in December, the lowest in almost six years.
China’s Cabinet issued measures yesterday to further open the world’s second-largest economy to foreign investment, including easing limits on investment in banks and other financial institutions, as China grapples with slowing economic growth.
China will lower restrictions on foreign investment in banking, securities, investment management, futures, insurance, credit ratings and accounting sectors, the State Council said in a statement posted on its website.