China’s financial regulators have further tightened oversight of foreign investments by the country’s struggling state-owned enterprises, in a bid both to stem capital outflows and rein in risk.
Starting this week, China’s finance ministry will require state groups at both national and provincial level to defend the financial viability of overseas investments and assess their political risks before proceeding, while also mandating stricter auditing mechanisms.
The regulations also require all state groups to better document foreign currency transactions to assuage concerns that overseas infrastructure investment could mask capital outflows.
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