ODI Curbs

Beijing Review - - This Week Economy -

The Chi­nese Gov­ern­ment re­leased a guide­line on Au­gust 19 to fur­ther tighten the grip on or ban out­bound di­rect in­vest­ments (ODI) in sec­tors in­clud­ing real es­tate, ho­tels, en­ter­tain­ment, sports and casi­nos to avoid in­vest­ment risks or po­ten­tial crimes.

China will con­tinue to tighten re­view of the au­then­tic­ity of over­seas in­vest­ment and its com­pli­ance with reg­u­la­tions, hop­ing to guide more in­vest­ment into the real econ­omy and to re­duce in­vest­ment in sec­tors Chi­nese com­pa­nies are not pro­fi­cient at manag­ing, said Gao Feng, spokesper­son of the Min­istry of Com­merce (MOFCOM).

“The gov­ern­ment will con­tinue to en­cour­age le­gal over­seas in­vest­ments, es­pe­cially in projects tied to the Belt and Road Ini­tia­tive, and will help with the de­vel­op­ment of home in­dus­tries,” said Gao.

The guide­line stressed that ODI in hi-tech in­dus­tries, hi-end man­u­fac­tur­ing, agri­cul­tural co­op­er­a­tion and ca­pac­ity-shar­ing projects that can help China ex­port its stan­dards, qual­ity machin­ery and in­dus­trial equip­ment will be fur­ther en­cour­aged to op­ti­mize China’s out­bound in­vest­ment port­fo­lio.

The stricter scru­tiny of over­seas in­vest­ment comes as China’s top lead­er­ship has pledged to pre­vent fi­nan­cial risks, es­pe­cially against the back­drop of the de­cline of for­eign ex­change re­serves and the rise of cap­i­tal out­flow.

Non-fi­nan­cial ODI by Chi­nese

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