SHANGHAI – China’s National Development and Reform Commission issued on Friday a draft of the guidelines regulating Chinese companies’ investments abroad in sensitive sectors with the aim of safeguarding national security.
The draft, which according to local media seeks to avoid capital outflows, money-laundering and improve supervision, safeguards national security and supports the sound development of foreign investment.
Regulatory bodies, therefore, may block any outgoing investment on grounds of national security and thus act in a manner similar to the Committee on Foreign Investment in the United States.
During the first half of 2017, China signed 163 outbound operations worth $43 billion, 65 percent less in terms of total transaction value compared to the same period in 2016 due to stricter capital control measures on investment.
Recently, China issued other regulations limiting investments by national companies in foreign sports clubs as well as in the real estate sector, while investments in sectors such as gambling are to be banned.
Meanwhile, investments will be encouraged in accordance with Beijing’s ambitious multinational infrastructure development project called the New Silk Routes.