China to speed up drafting overseas investment regulations

[BEIJING] China will speed up drafting regulations on overseas investment, as investment in sectors such as property has shown irregularities, a senior commerce ministry official was quoted as saying on Tuesday.

Zhou Liujun told state-owned news agency China News Service there were many risks underlining the huge surge in overseas investment this year, and some firms were making "big-volume"deals abroad even as they faced mounting debt that exceeded their total assets.

"In the property sector, overseas investment has shown unreasonable tendencies," Mr Zhou was quoted as saying.

He said the proposed regulations were being studied and their content was "very rich", but he did not elaborate or give any details.

From January to November, China's non-financial outbound direct investment soared 55.3 per cent to 1.07 trillion yuan (S$222.97 billion) from a year earlier.

Beijing recently announced a string of measures to tighten controls on money moving out of the country, including closer scrutiny of outbound investments.

The moves were made as the yuan skidded to an 8-1/2 year low and China's foreign exchange reserves fell to the lowest level in nearly six years.

But Mr Zhou stressed that China hadn't changed its policies and principles towards overseas investment, which was to encourage capable Chinese firms with suitable conditions to "go out" and invest.

REUTERS