China unveils new rules on overseas investment
Posted on September 10, 2014
New measures to allow easier overseas investment by domestic companies have beenreleased by the Chinese Ministry of Commerce (MOC).
Under the new rules, the ministry cedes its previous control over the number ofinvestment projects. Only overseas investment projects in sensitive countries or regions,as well as in sensitive industries will require approval by the MOC.
Such sensitive countries or regions include countries that have not established diplomaticties with China and those countries under the United Nations sanctions. Other overseas investment projects only need to register with the MOC, according to the new measuresposted on their website Saturday.
Aimed at allowing more freedom for outbound investment, the measures take effect onOct. 6 this year.
Previously, any overseas investment project worth more than 100 million U.S. dollars wasrequired to be approved by the MOC. Overseas investment in energy and mining, orprojects between 10 million and 100 million U.S. dollars, must also be approved byprovincial commerce departments.
Overseas investment by industries under China’s export restriction policies or thoseprojects affecting more than one foreign country’s interests are subject to the MOC’sapproval review.
Apart from the MOC, the National Development and Reform Commission (NDRC),China’s top economic planner, has the power to approve or veto an overseas investmentproject.
According to the new measures unveiled by the NDRC in April, Chinese companiesplanning to invest less than 1 billion U.S. dollars overseas will only need to register withauthorities rather than get approvals from the NDRC.
Any overseas investment project larger than 1 billion U.S. dollars must be approved by theNDRC and investment above 2 billion U.S. dollars must be approved by the State Council,or China’s cabinet.
As one of the most popular destinations for foreign investment, China has also become theworld’s third-largest investor during the first seven months of the year, investing 52.55billion U.S. dollars in nonfinancial companies in 149 countries or regions, according tothe MOC.
September 07, 2014