NEW RULES SOON TO CLARIFY CHINESE CAPITAL CONTROLS

Beijing is set to clarify its new regulations on overseas investment sometime this year after confusion reigned in the market arising from its ‘unofficial’ restriction of funds outflow since end 2016.

After the big uncertainty surrounding China’s capital controls imposed in January, and dire predictions of the end of Chinese property buying spree worldwide as a result, Beijing through its media mouthpiece, Xinhua reported on 21st March that the government will introduce new regulations on overseas investment this year.

The regulations will provide guidance on investment in other countries and regions, while identifying the industries that the government will encourage or ban.

To be initiated by the Ministry of Commerce and National Development and Reform Commission, the regulations will integrate existing rules and fine-tune or amend them, giving more certainty on overseas investments, approval procedures, financing, profit-sharing and tax policies.

Investments that bring good social and economic benefits, and conform to the One Belt, One Road Initiative will be encouraged, while ‘blind and irrational’ investments will be discouraged and strictly regulated. The regulations will also mete out punishments to investors who violate domestic and foreign law.

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