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In Overseas Deals, China Goes Easy Only on Tech, Manufacturing

By Peng Qinqin and Liu Xiao
The manufacturing and information technology industries have accounted for a much higher proportion of China’s outbound investment this year following the central government’s clampdown on “irrational” deals overseas in areas such as real estate. Above, diesel engines get assembled at a Quanchai Group Co. Ltd. plant in Anhui province on March 3. Photo: IC
The manufacturing and information technology industries have accounted for a much higher proportion of China’s outbound investment this year following the central government’s clampdown on “irrational” deals overseas in areas such as real estate. Above, diesel engines get assembled at a Quanchai Group Co. Ltd. plant in Anhui province on March 3. Photo: IC

Chinese regulators remain supportive of outbound deals in technology and manufacturing, while keeping a wider curb on investments in most other sectors overseas, multiple industry sources told Caixin.

After a record capital exodus in 2016 as Chinese companies binged on overseas acquisitions, the government clamped down on what it called “irrational” deals via measures such as greater scrutiny and turning off the bank funding tap. On August 18, China’s State Council released rules that severely restricted investment in five sectors: real estate, hotels, cinemas, entertainment and sports. However, the rules have been in place informally since late last year.

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