Bei­jing eases over­sight of some in­vest­ments over­seas

China Daily (Hong Kong) - - FRONT PAGE - By WANG YANFEI wangyan­fei@chi­

China will re­lax its su­per­vi­sion of out­bound in­vest­ment projects, with at­ten­tion fo­cus­ing only on in­vest­ment in sev­eral key in­dus­tries af­ter tight­ened mea­sures were im­ple­mented last year.

“Reg­u­la­tory au­thor­i­ties will con­tinue to pay close at­ten­tion to over­seas in­vest­ment in key in­dus­tries such as prop­erty, ho­tels, en­ter­tain­ment, cin­e­mas and sports clubs,” said Yan Pengcheng, spokesman for the Na­tional De­vel­op­ment and Re­form Com­mis­sion.

Yan said com­pa­nies plan­ning to in­vest in those in­dus­tries in for­eign coun­tries should “make cau­tious de­ci­sions”.

Those in­dus­tries are the lat­est ar­eas to fall un­der the gov­ern­ment’s fo­cus, he said.

Com­pa­nies will have to sub- mit ad­di­tional doc­u­ments to win ap­proval, ac­cord­ing to the Min­istry of Com­merce.

The an­nounce­ment nar­rows the num­ber of ar­eas fac­ing such scru­tiny — it re­moved ar­eas in­clud­ing po­ten­tial in­vest­ment risks posed by “small par­ent com­pa­nies with large sub­sidiaries and by new en­ter­prises estab­lished in a short pe­riod of time rush­ing to go global.”

These cri­te­ria used to be in­cluded in the doc­u­ments re­leased by reg­u­la­tory bod­ies in De­cem­ber.

It is that ad­di­tional reg­u­la­tion that led to a re­duc­tion in the amount of out­bound in­vest­ment in the first half of 2017, Yan said.

China’s non­fi­nan­cial out­bound in­vest­ment plunged by 45.8 per­cent year-on-year in the first half to $48.19 bil­lion, ac­cord­ing to the Min­istry of Com­merce.

Dur­ing that pe­riod, China’s real es­tate in­vest­ment in for­eign coun­tries fell by 82.1 per­cent year-on-year, and the out­bound in­vest­ment in cul­ture, sports and en­ter­tain­ment de­creased by 82.5 per­cent year-on-year, ac­cord­ing to the Min­istry of Com­merce.

Yan said the Chi­nese gov­ern­ment sup­ports le­gal out­bound in­vest­ment ac­tiv­i­ties. “Projects in­volved in the Belt and Road Ini­tia­tive will be en­cour­aged, in par­tic­u­lar,” he said.

Bai Ming, deputy di­rec­tor of the re­search in­sti­tute un­der the Min­istry of Com­merce, said it makes sense for the gov­ern­ment to keep an eye on cer­tain types of out­bound in­vest­ment projects.

He said do­ing so is im­por­tant be­cause many do­mes­tic com­pa­nies lack enough knowl­edge, such as po­lit­i­cal risks and the busi­ness en­vi­ron­ment in for­eign coun­tries.

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