The government is limiting overseas investments in property, hotels, entertainment, sports clubs, and the film industry. This is because some of the overseas investments in those areas were purely driven by financial returns and failed to drive economic growth in the host country. These deals also increased capital outflows from China, hitting the security of the financial system.
The green light is being given to investments in line with the Belt and Road Initiative and those conducive to the country’s industrial advancement. That means that capital from China will continue to pour into high-end industry, energy and agriculture. How effective are these guidelines in stopping China’s capital outflows? Liu Baocheng, dean of the Center for International Business Ethics from the University of International Business and Economics, David Dollar, senior fellow with the Foreign Policy and Global Economy and Development programs at the Brookings Institute, and Mike Bastin, professor at University of Southampton in the UK, weigh in on the issue.
