China is reportedly feeling the economic pinch as cash has been leaving the communist country in overseas investments, including into the United States, thus, prompting the Chinese government to crack down on investors.
The Wall Street Journal reported that China’s State Council published new guidelines on its main government website Friday, announcing it was restricting overseas investments in areas such as property, hotels, cinema, entertainment and sports teams.
The Chinese government stated it will be keeping a list in order to track down and penalize offenders.
The newly published guidelines, dated Aug. 4, declared that authorities must increase oversight of investment projects that don’t meet the technology, environmental and security standards mandated by the destination countries.
Over the past year, Chinese authorities have been warning of the “risks” of overseas investments, as they have tried to slow the capital fleeing the country, which has weakened economic growth, but this is reportedly the first time they have published official guidelines.
The rules were jointly drafted by the country’s top economic planner, commerce ministry, central bank and foreign ministry, the Wall Street Journal reports.
Also being restricted are the establishment of equity-investment funds and any investment platforms that aren’t linked to a specific project.
The country is reportedly trying to bring funds back onshore by attracting more foreign investments.
China has ramped up pressure over the past year, and reported Tuesday that “irrational outbound investment has been effectively contained.”
Comparing the first seven months of 2017 with the same time period last year, the commerce ministry reported that China’s outbound direct investment outside the financial sector declined 44.3 percent, with investment in offshore property down by 81.2 percent and entertainment investments down by 79.1 percent.
President Donald J Trump has repeatedly stated that he intends to “get tough on trade with China” and bring manufacturing back to America, as he has explained that China is benefiting more than the United States on trade deals between the two countries.
China has spent more than $100 billion since the year 2000, buying or making significant investments in 1,900 U.S. companies. And the investments are getting bigger and more accelerated.
Months ago DML NEWS published an article about how the Chinese are buying up real estate here in the United States at a rapid pace, and in record numbers. The Chinese are buying more real estate in the U.S. than any other country. Tact on this: In the first quarter of 2016, Chinese firms had $30 billion in pending or completed deals, according to Stephen Orlins, head of the National Committee on U.S.-China Relations.
Chinese acquisitions now make up more than one-fifth of all foreign purchases or significant investments in the U.S.
One major concern is that many of the Chinese purchasers are either state-owned or have close government ties in Beijing. And yet, they are responsible for almost 100,000 American jobs.
John Schindler, a security expert and former National Security Agency analyst and counterintelligence officer who specializes in espionage and terrorism, is voicing concern about how Chinese espionage is growing both online and offline, and how it represents a serious threat to American security and prosperity.
John Schindler: ” Cyber theft and online pilfering of American intellectual property was castigated as “the greatest transfer of wealth in history” by the director of the National Security Agency back in 2012, and things have only gotten worse since then, with China taking the lead in stealing our secrets for profit and strategic advantage. Last year, the FBI reported a shocking rise of 53 percent in economic espionage, with the “vast majority” of those cases originating in China. Using immigrants to enable such theft is a serious problem, as evidenced by the recent case of a wealthy Chinese entrepreneur who moved to Canada, where he assisted hackers back in China with stealing Pentagon secrets, particularly relating to advanced aircraft designs.
Beijing’s interest in our secrets extends far beyond national security and advanced technology. Chinese espionage aims at many sectors of our economy, even agriculture. Our government recently warned farmers to be wary of Chinese businessmen showing interest in genetically engineered seed and other commercial secrets—they may be spies. In January, Mo Hailong, one of six Chinese nationals Federal authorities accused of digging up seeds from Iowa farms to send back to China, pleaded guilty in a case that the Justice Department treated as a national security matter—not a normal criminal prosecution. This agricultural espionage ring was acting at Beijing’s direction, according to authorities familiar with the case, constituting the norm these days as Chinese spies seek any commercially valuable secrets they can pilfer from unsuspecting Americans.”
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