China issues code of conduct for firms investing abroad
SHANGHAI - Agence France-Presse
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 Dec. 19 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 Dec. 18 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 on Dec. 19 that a similar code for state-owned enterprises 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.
