NDRC publishes new rules for overseas business, streamlines procedures

Updated 2017-12-27 09:30:18 Global Times

The National Development and Reform Commission (NDRC) has released new rules to streamline administrative procedures and strengthen the regulation of outbound investment by domestic firms.

The measures, which take effect on March 1, 2018, waive a provision in a 2014 rule that required companies acquiring or bidding for overseas projects worth over 0 million to report project information in advance, according to the NDRC website.

When the new rule comes into force, verification will ensure that the investment does not violate any laws, regulations, the country's development plan, or policies at macro and industrial levels, the NDRC said, noting that investments should not threaten China's national interests or security.

State-owned enterprises (SOEs) have always been the major force in going global, even under the Belt and Road initiative. The new measures will help enterprises seeking more growth overseas, Wang Jiang, director of the Beijing-based Central SOE Think-tank Alliance, told the Global Times on Tuesday.

"On one hand, the NDRC is giving more power to enterprises when it comes to outbound investment. On the other, the measures will regulate the scope of such investment," Wang said.

In the past, misconduct in outbound investment by some enterprises, especially SOEs, often led to a series of mistakes not regulated by the financial reporting system. The result was that State-owned assets were lost, noted Wang.

"Companies transferred assets overseas through loans obtained domestically, [this is] another example of loss of State-owned assets. It is therefore necessary to strengthen regulation throughout the outbound investment process," Wang stressed.

In some cases, overseas investment has conflicted with the domestic interests of enterprises. Investments in sensitive regions are exposed to high risks, both politically and economically, said Wang.

The new measures rein in risks, encourage SOEs to focus on Belt and Road countries and to build world-class enterprises, Wang concluded.

The new measures will help prevent irrational investments and protect the rights and interests of investors. Companies will be guided to ensure their financial security, Liu Junhai, a law professor at Renmin University of China, told the Global Times on Tuesday.

"I believe the new measures are intended to encourage and protect outbound investment through law-based approaches," Liu said.

The new measures remove some administrative hurdles. For instance, only enterprises managed by the central government will need to file with the NDRC. China's non-financial outbound direct investment from January to November fell 33.5 percent year-on-year, official data showed.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58August 15 2018 13:30:48

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16August 15 2018 13:30:48

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18August 15 2018 13:30:48

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords