China curbs capital outflows

Beijing was tightening its screening on Chinese companies' overseas investments, the government and media reports said Tuesday.

Authorities would "combine facilitating foreign investment with guarding against risks" by scrutinizing proposed deals, said a statement posted on the website of the National Development and Reform Commission, the country's top economic planner.

Bloomberg reported that new restrictions would ban most deals over $10 billion (9.43 billion euros), with sources cited by Reuters adding that the State Administration of Foreign Exchange (SAFE) had begun vetting transfers abroad worth $5 million or more, including deals with prior approval.

Big spender

Chinese firms have been on a multi-billion-dollar spending spree for years, culminating this year in state-owned ChemChina's $43-billion bid for Swiss seed giant Syngenta. It has spent a good chunk of its vast foreign exchange reserves, the world's largest, in its effort to keep the yuan from falling too rapidly.

But the national currency has kept weakening against the greenback, hitting a nearly eight-year low this month.

While China has been investing heavily abroad, foreign partners in the US and across the European Union have complained about a lack of reciprocal access to Chinese industries.

Many sectors are off-limits or restricted to outside investment, including telecommunications, the media, energy and legal and financial services.

hg/sgb (AFP, Reuters)