China is closing the doors to investment
offshore. Some of its corporates risk being left
China's battle against capital flight has reached new
heights. After years of encouraging corporates to buy foreign
assets ranging from industrial and manufacturing companies to
technology and entertainment groups, the country's government
is changing its priorities. It has been putting the brakes on
capital outflows and offshore growth – notably by
reinforcing controls in place for foreign M&A transactions
– and instead focusing on bulking up its falling
foreign currency reserves.
The world's second-largest economy has, so far, seen
tangible results of this strategy as its foreign exchange
reserves increased by $7 billion last month –
returning to the $3 trillion level – after falling to
$2.9 trillion in January. But this level is still far behind
the $4 trillion recorded in 2014.
And worryingly, China's crackdown on capital outflows is
going further. It is...