China releases guidelines to regulate outbound private investment

China's economic planner Monday issued guidelines for outbound private investment to address problems, including irregular operations, that emerged amid the accelerated global drive of domestic companies.

The guidelines aim to guide offshore business operation, Meng Wei, spokesperson of the National Development and Reform Commission (NDRC), said at a press conference.

Meng Wei, spokesperson of the National Development and Reform Commission, speaks at a press conference on December 18, 2017. [Photo: China Plus]

While acknowledging the contribution of private businesses to goods and technology exports and the Belt and Road, Meng said there were also side effects, citing blind decision-making, vicious competition and neglect of quality and safety.

To tackle the issues, the document was jointly compiled by agencies including the NDRC, Ministry of Commerce and People's Bank of China.

"Private businesses should improve internal rules on decision-making and financial management in terms of overseas investment, and strengthen risk control by using safety measures and contingency plans," according to the document.

Domestic and overseas procedures on investment should be followed and social responsibilities fulfilled. Businesses should also comply with local environmental protection laws.

Meng said similar rules for state-owned enterprises were in the pipeline.

The document is part of government effort to cool the frenzy of overseas acquisitions and curb illicit capital outflows. 

The State Council said in August that the country would limit overseas purchases of real estate, hotels and sports clubs, and encourage deals in infrastructure and new technology.

China's non-financial outbound direct investment from January to November fell 33.5 percent year on year.