China to curb foreign investment by stateowned firms

SHANGHAI: China said it will ban or closely monitor overseas investments by state- owned firms in certain sectors, the latest move in a government fight to stem capital flight and what it has called ‘irrational’ spending abroad.

The state- assets watchdog, which manages the country’s 102 state- owned giants, plans to draw up a list of sectors that will either be off-limits to investment by SOEs or under strict supervision, according to a government statement Wednesday.

The notice by the StateOwned Assets Supervision and Administration Commission gave no details on what sectors would be singled out, nor any timing.

But the state-run China Daily reported Thursday that the list would include heavily polluting industries or those vulnerable to global commodity price fluctuations, such as business related to energy, mining, real estate and the oil sector.

It quoted the commission’s vicechairwoman Huang Danhua as saying the government would, however, seek to encourage SOE overseas investment in sectors including high-speed rail, roads, telecommunications, and nuclear power.

Overseas direct investment surged 44 per cent to 1.13 trillion yuan (now US$ 165 billion) in 2016, surpassing inward investment of 813.2 billion yuan, according to the government, as Chinese companies went on a worldwide spending spree across a range of sectors.

In one of the largest moves, ChemChina made a US$ 43 billion bid for Swiss seed giant Syngenta that is awaiting approval by EU regulators. — AFP