Guideline tightens control of outbound direct investments

The Chinese government released a guideline on Friday to further tighten the grip on or ban outbound direct investments in sectors including real estate, hotels, entertainment, sports and casinos to avoid investment risks or potential crime.

The policy came as the government increased scrutiny of overseas investment and reined in speculative deals by Chinese companies in some industries and sectors, such as equity investment funds, the key military and national defense sector and highly polluting industries, as well as businesses in war-torn or politically unstable areas.

China will continue to tighten review of the authenticity of overseas investment and its compliance with regulations, hoping to guide more investment into the real economy and to reduce investment in sectors in which Chinese companies are not proficient at managing, said Commerce Ministry spokesman Gao Feng.