First up. China on Friday issued additional guidelines to regulate overseas investments. We explain and show you what the new guidelines mean for your money.

 

For outbound investors in China, it's less risky to park money overseas without stepping into the warning zone of the Chinese government. The State Council issued new rules for overseas investment on Friday. Many of the guidelines were widely expected. Outbound investments will fall into three catergories: encouraged, limited and forbidden. Any deal that threatens China's national interests or security is forbidden.

 

Meanwhile, the government is limiting deals in property, hotels, entertainment, sports clubs, and the film industry.The state council said that some of the overseas investments in those areas were purely driven by financial returns and failed to turn the profits into domestic economic growth. The state council said that as a result, those deals increased capital outflows from China, hitting the security of the financial system. The state council also singled out M&As that didn't comply with environmental protection and energy standards in other countries. Those deals are blamed for causing business losses and diplomatic friction.

 

So what overseas investments does China support? The government is giving the green light to investments related to its Belt and Road initiative, without giving a blacklist of industries. Investments into sectors that fit China's national economic interests were also given the nod. That means that capital from China will continue to pour into high-end industrials, energy and agriculture. Financial firms also can continue their overseas expansion plans. There is still a blacklist though -- a list that marks domestic firms that violate the new overseas investment rules. XC CGTN