China releases new outbound investment regulations

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China's top economic planner released new rules on Tuesday to streamline administrative procedures and strengthen regulations for outbound investment by domestic firms.

Simplified procedures

According to the National Development and Reform Commission (NDRC), the new rules, effective from March 2018, waived a provision from a 2014 rule that requires companies that acquire or bid for overseas projects worth over 300 million US dollars to report project information beforehand.

For most industries, enterprises seeking outbound investment will only need to file records with central or local economic planners on projects, according to the new rules.

These rules will also simplify approval procedures and relax requirements on the deadlines for companies to obtain approvals or file records.

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More transparent management

Meanwhile, the NDRC said the investment activities of firms established overseas by domestic companies will be put under the government management framework.

The government will also keep credit records of irregularities concerning outbound investment and punish misconduct such as unfair competition and irregular financing activity.

The rules say the outbound investment activities of domestic firms should neither threaten China's national interests and security nor violate the country's macroeconomic and industrial policies.

The NDRC will set up a nationwide online platform to make management and services for outbound investment more convenient and transparent.

Status quo of China's outbound investment

China's outbound direct investment has seen rapid growth in recent years. However, noting an "irrational tendency" in the field, Chinese authorities have set stricter rules and advised companies to make more careful investment decisions.

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In a document released in August, the State Council said overseas investment in areas including real estate, hotels, cinemas and entertainment would be limited, while investment in sectors such as gambling would be banned.

Chinese investors spent a total of 107.55 billion US dollars on 5,796 enterprises from 174 countries and regions during the first 11 months of this year, which mainly went to leasing and commercial services, manufacturing, wholesale and retail, and information technology sectors.

Source(s): Xinhua News Agency