No casinos or brothels — new overseas investment rules - SupChina
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No casinos or brothels — new overseas investment rules

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Bloomberg reports that China has formalized rules restricting overseas investments, “making explicit its de facto campaign against ‘irrational’ acquisitions of assets.” The rules (in Chinese) were issued by the State Council. There are three categories:

Banned

  • Core military technology and products that have not been approved, gambling, the sex industry, and investments contrary to national security.
  • Business that involves the illegal export of technology, artworks, and products.
  • Any industry that China banned by any international treaty signed by China.
  • Any investment that threatens or has the potential to threaten China’s interests or national security.

Restricted

  • Investments in countries that have no diplomatic relations with China, are at war, or in sensitive countries and regions that China has signed agreements with that restrict investment.
  • Real estate, hotels, cinema chains, entertainment, and sports clubs.
  • Investments in funds, platforms, or companies that have no real commercial projects.
  • Investments that do not meet environmental and safety standards of the target country.

Encouraged

  • Investments that further the Belt and Road initiative and relevant infrastructure.
  • Investments that steadily advance China’s production capacity, manufacturing of high quality equipment, and industry standards.
  • Investments in cooperation with foreign companies that enhance China’s new technology and advanced manufacturing and encourage establishing R&D centers abroad.
  • Prudent investments in exploration and exploitation of offshore oil and gas, mineral, and other energy resources.
  • Agriculture, forestry, and fishing.
  • Orderly investments in trade, culture, logistics, and where suitable, finance.

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Jeremy Goldkorn

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of SupChina, and co-founder of the Sinica Podcast.

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