Chinese firms advised to be cautious with overseas investments

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Chinese domestic companies should be cautious about investing in high-profile overseas acquisitions, especially in sectors such as entertainment and sports industries, China's commerce ministry reiterated on Thursday.

Chinese firms should exercise "prudent" decision-making regarding overseas investments in real estate, hotels, film studios, entertainment and sports clubs, Gao Feng, spokesperson for the Ministry of Commerce said.

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He made the remarks when responding to questions about deals made by Dalian Wanda, a property conglomerate focused on aggressive overseas investment.

Wanda has been very active globally, with deals with US cinema chain AMC Entertainment Holdings Inc., Hollywood film studio Legendary Entertainment, Odeon & UCI Cinemas and Nordic Cinema Group, as well as a UK luxury yacht maker. It also owns a stake in soccer club Atletico Madrid.

China will support home-grown companies investing overseas according to market and international rules, Gao said.

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"Investment in the Belt and Road construction, international capacity cooperation and industrial upgrading will receive special support," he pointed out. He added that China will continue risk control to ensure healthy and orderly growth of outbound investments.

China's non-financial outbound investment dropped 45.8 percent year on year in the first half, with money pumped into property, sports and entertainment suffering a substantial retreat of more than 80 percent.

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