After record year, China reins in foreign deals

BEIJING — China struck $225 billion in deals to acquire companies abroad last year, a recordbreaking number that signaled to the world that Chinese business leaders were hot to haggle.

Now, China — with a worried eye on the money leaving its borders — is telling some of its companies to cool it down.

On Saturday, in the strongest public signal yet that Beijing was changing course, China’s commerce minister castigated what he called “blind and irrational investment.” At a news briefing during the annual meeting of China’s congress, Zhong Shan, the minister, said officials planned to intensify supervision of what he called a small number of companies. “Some enterprises have already paid the price,” said Zhong, a protégé of President Xi Jinping. “Some even have had a negative impact on our national image.”

Just a day earlier, Zhou Xiaochuan, the country’s top central banker, also questioned the wisdom of some recent Chinese overseas deals.

The comments are the clearest confirmation that the government is hitting the brakes on the rush overseas by deep-pocketed Chinese companies with a reputation for having more money than deal-making aptitude.

A series of Chinese deals have come apart this winter — though it is not always clear whether Beijing has stepped in, or whether buyers themselves suddenly decided they were making a big mistake.

Chinese families and companies have been rushing to move money out of the country for more than a year amid worries over a slowing national economy, a weakening currency and numerous other problems. The outflow has been expensive — China has spent $1 trillion during the past 2 1/2 years to shore up the value of its currency — and threatens to damage the country’s efforts to help its rising middle class.

China in recent months has increased its efforts to stanch the flow. The effort appears to be showing success: The most recent data, for February, showed a slight increase in the size of China’s huge holdings of foreign money managed by its currency administrator, one of the rough proxies for the sum of money moving out.