china issues code of conduct for firms investing abroad
Last Updated : GMT 05:21:58
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 05:21:58
Arab Today, arab today

China issues code of conduct for firms investing abroad

Arab Today, arab today

Arab Today, arab today China issues code of conduct for firms investing abroad

Authorities are said to be targetting large private firms such as Fosun and Wanda.
Shanghai - Arab Today

China has released a code of conduct for private companies investing abroad as it seeks to head off risky acquisitions, with state media reporting on Tuesday that a blacklist of violators was in the works.

The move by the country's top economic-planning agency appears to be the latest in a government campaign to prevent acquisitive Chinese firms from over-extending themselves with ill-advised deals abroad that could threaten financial stability at home.

The guidelines, released on Monday by the National Development and Reform Commission (NDRC), contain few hard and fast rules, but rather a collection of big-picture advice on operating overseas.

This includes staying within a company's financial constraints and core competencies, avoiding high-leverage financing, respecting local laws and customs, and adhering to socially and environmentally responsible operations.

The state-run China Daily reported Tuesday that a similar code for state-owned entrprises is also in the works, as well as a blacklist of violators.

It cited an unnamed NDRC official, who said the guidelines and blacklist "will become major policy tools in curbing investment risks", according to the newspaper.

The code will complement guidelines issued in August, which laid out rules restricting investment in industries such as property, sports and entertainment, the official was quoted saying.

China has moved aggressively over the past year to halt a flood of overseas investment that has raised concerns of capital flight, and contain in ballooning debt at home that has drawn warnings of a potential global financial crisis.

In particular, authorities are said to be targetting large private Chinese companies such as Wanda, Fosun, HNA and Anbang, which have drawn increased scrutiny over concerns they were racking up dangerous debt levels with tens of billions of dollars in sometimes flashy foreign investments.

In conjunction with the private-firm guidelines, the NDRC also released a statement by an unnamed official with the planning agency saying some Chinese companies had encountered "irregularities in overseas investments".

"Some companies did not follow domestic and foreign audit procedures and conducted illegal investments overseas," the statement said.

"Some companies made blind decisions and caused huge economic losses. Some companies were involved in malignant competition and undertook overseas projects regardless of the cost."

Source: AFP

 

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china issues code of conduct for firms investing abroad china issues code of conduct for firms investing abroad

 



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china issues code of conduct for firms investing abroad china issues code of conduct for firms investing abroad

 



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