China has urged domestic companies to avoid "irrational" overseas investments following a record-setting buying spree that has worried authorities about capital outflows and rash spending. The rebuke carried by the Xinhua news agency did not single out particular firms but highlighted areas such as sports, hotels and entertainment where there have been major deals involving Chinese groups.
"We advise such companies to make cautious decisions," according to a joint statement issued by the Ministry of Commerce and other agencies and published late Tuesday. "Regulatory departments are also closely watching the irrational tendency in overseas investment in fields including real estate, hotels, cinemas, entertainment, and sports clubs." The wave of overseas investment this year has complicated efforts by Beijing to stem capital outflows, which are putting downward pressure on the yuan.
Chinese mergers and acquisitions abroad in the first eight months of the year reached $61.7 billion, surpassing those for all of 2015, official data showed recently. Among the more high-profile deals are Wanda Group's purchase of Hollywood studio Legendary for $3.5 billion, as well as London-based Odeon & UCI cinema group in a deal worth around $1.2 billion.
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