China issues code of conduct for firms investing abroad
SHANGHAI - Agence France-Presse
China has released a code of conduct for private companies investing abroad as it seeks to head off risky acquisitions, with state media reporting on Dec. 19 that a blacklist of violators was in the works.
The move by the country’s top economic-planning agency appears to be the latest in a government campaign to prevent acquisitive Chinese firms from over-extending themselves with ill-advised deals abroad that could threaten financial stability at home.
This includes staying within a company’s financial constraints and core competencies, avoiding high-leverage financing, respecting local laws and customs, and adhering to socially and environmentally responsible operations.
The state-run China Daily reported on Dec. 19 that a similar code for state-owned enterprises is also in the works, as well as a blacklist of violators.
It cited an unnamed NDRC official, who said the guidelines and blacklist “will become major policy tools in curbing investment risks”, according to the newspaper.