China issues guidelines for firms

BEIJING: China’s state planner issued guidelines yesterday for monitoring the overseas activities of Chinese firms and individuals to prevent tax fraud, money laundering, illegal financing, and activities damaging to the country’s reputation.

In a statement, the National Development and Reform Commission (NDRC) warned that the government will record and tally instances of laws and regulations being broken in China or abroad, and offenders would be punished.

In addition to illegal activities, the guidelines say actions that “violate international conventions and United Nations resolutions, or that disrupt foreign economic cooperation, adversely impact the Belt and Road initiative, or harm China’s reputation”, will be recorded.

The guidelines also focus on monitoring cross-border capital flows by insisting overseas deals are reasonable and disclosures are accurate.

China clamped down on capital outflows last year after its foreign currency reserves fell by nearly US$1 trillion (RM4.10 trillion).

Companies or individuals that break rules will be penalised in various ways. Authorities could reject their applications for overseas investments and foreign exchange purchases, restrict access to government subsidies and refuse to sell state land, said the NDRC. Reuters