According to the Ministry of Commerce, China’s overseas investment is expected to continue to grow next year, despite the government’s efforts to tighten the irrational overseas investment. It is reported that the government intends to put a cap on the investments in real estate, hotels, entertainment, sports, and, at the same time, to carry out supervision on overseas investments that are outside the company’s main business and the overseas investment projects with largest volume that are bigger than mother company itself.
China’s overseas investment in the past 11 months has reached $161.7 billion with an increase three times higher compared with the same period last year. For example, Wanda Group’s acquisition of US movie making company Legendary Pictures at $3.5 billion, Midea Group spent $5 billion to take over the German robot maker KUKA, and Ampang insurance group bought from the Black Stone Group luxury residential project at $6.5 billion.
Investment in the hotel industry, entertainment and sports are the ideal channel for money laundering so that the National Development and Reform Commission, the Ministry of Commerce, people’s Bank and the State Administration of Foreign Exchange jointly have issued a notice recently, trying to limit the irrational overseas investment.
In the future, the government will encourage overseas investment in infrastructure, especially in the “The Belt and Road” area to increase investments; on the other hand, the hot money speculation and investment will be subject to a more stringent examination and supervision.
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