November 30, 2016
In an attempt to slow capital fleeing offshore, China will soon announce new measures that will exert tighter controls on companies that invest overseas. The targets of these controls are “extra-large” foreign acquisitions valued at $10 billion and above, and property investments by state-owned firms valued at $1 billion and above.
The measures come during an overseas buying binge by Chinese companies. Total overseas direct investment stood at $145.9 billion during the first nine months of 2016, a 50% increase year over year. Chinese buyers have racked up a total of $212.7 billion of overseas investments in 2016.
The government is implementing controls, as Chinese money flows overseas due to a weak economy and yuan. The new controls will remain in effect until the end of September 2017, ahead of a major reshuffle of the top Communist Party leaders.
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