The National Development and Reform Commission has unveiled plans to monitor the overseas activities of Chinese companies and citizens in order to prevent illegal conduct from causing repetitional harm.
NDRC announced via its official website on Tuesday that it will maintain records of legal or regulatory infractions by Chinese companies in foreign jurisdictions, in order to better regulate their offshore business and investment activities.
According to NDRC’s new set of guidelines the regulator will keep a record of any actions that “violate international conventions and United Nations resolutions, or that disrupt foreign economic cooperation, adversely impact the Belt and Road initiative, or harm China’s reputation.”
The guidelines place heavy emphasis upon the monitoring of cross-border capital flows, requiring that any overseas transactions be “rational” and related disclosures accurate.
Chinese individuals or companies that breach the NDRC’s new guidelines will have their record of conduct made publicly available via the government website www.creditchina.gov.cn.
They could also be subject to a range of punctuative measures, including refusal of applications for overseas investment, forex purchases or state land acquisitions, as well as restricted access to government subsidies.
Regulators will also make reference to the records when reviewing applications to establish banks or obtain equity stakes in financial institutions.
The move comes roughly a year after China launched heavy capital controls to stymie a near $1 trillion drop in its foreign reserves, as well as sharp depreciation of the renminbi.
