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Government to curb foreign investment by state-owned firms
The tide of outgoing investment has alarmed authorities, who are grappling with slowing domestic economic growth.
In one of the largest China's overseas investment moves in 2016, ChemChina made a $43 billion bid for Swiss seed giant Syngenta that is awaiting approval by EU regulators
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 released on Wednesday.
The notice by the State-Owned 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.
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It quoted the commission's vice-chairwoman 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 percent to 1.13 trillion yuan (now $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 $43 billion bid for Swiss seed giant Syngenta that is awaiting approval by EU regulators.
The tide of outgoing investment has alarmed authorities, who are grappling with slowing domestic economic growth, capital flight, and the weakening yuan, which is close to eight-year lows against the dollar.
Chinese authorities have responded by urging domestic companies to avoid "irrational" overseas investments and tightening screening of such plans while also announcing a number of measures aimed at attracting more foreign investment into China.
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