New guidelines to regulate private investment abroad
Print Edition
CHINA’S economic planner yesterday issued guidelines for outbound private investment to address problems, including irregular operations, that emerged amid the accelerated global drive of domestic companies.
The guidelines aim to guide offshore business operation, Meng Wei, spokeswoman for the National Development and Reform Commission, said at a press conference.
While acknowledging the contribution of private businesses to goods and technology exports and the Belt and Road initiative, Meng said there were also side effects, citing blind decision-making, vicious competition, and neglect of quality and safety.
To tackle the issues, the document was jointly compiled by agencies including the NDRC, the Ministry of Commerce and the People’s Bank of China.
“Private businesses should improve internal rules on decision-making and financial management in terms of overseas investment, and strengthen risk control by using safety measures and contingency plans,” according to the document.
Domestic and overseas procedures on investment should be followed and social responsibilities fulfilled. Businesses should also comply with local environmental protection laws.
Meng said similar rules for state-owned enterprises were in the pipeline. The document is part of government effort to cool the frenzy of overseas acquisitions and curb illicit capital outflows.
The State Council said in August that the country would limit overseas purchases of real estate, hotels and sports clubs, and encourage deals in infrastructure and new technology.
China’s non-financial outbound direct investment in the January-November period fell 33.5 percent year on year.
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