China may launch its first national rule governing overseas investment by the end of this year, state media reported.
The latest move to curb capital outflows comes as regulators seek to rein in Chinese firms' "imprudent or irrational investment."
The regulation will classify outbound investment projects into categories such as "encouraged" and "prohibited".
China's outbound direct investment began increasing rapidly several years ago, as Beijing encouraged companies to "go out" to acquire cutting-edge technologies and resources to power the country's economic growth. In 2015, outbound investment for the first time exceeded foreign direct investment into the country.
At a Monday forum, SAFE chief Pan Gongsheng blasted some overseas deals as abnormal, such as a domestic steel maker's acquisition of a foreign food company, and a Chinese restaurant's purchase of overseas internet gaming companies. He questioned the motives of many already debt-laden Chinese companies to borrow more for foreign acquisitions, adding that some were "transferring assets under the pretext of investing overseas."
Under the new rule, the government will favor projects it expects will be profitable, be in the public's interest, or comply with Beijing's "One Belt, One Road" initiative, which aims to strengthen economic ties among countries in Asia and Europe.
The regulations will clarify such things as how projects will be approved, how money can be transferred overseas and how profits will be distributed, as well as provide specifics on reinvestment and taxation.
The regulation is being worked on by governmental bodies that include the Commerce Ministry and the National Development and Reform Commission (NDRC). It may be introduced this year.
China may launch its first national rule governing overseas investment by the end of this year, state media reported.
