China may put new curbs on overseas investments

SHANGHAI Wed Jan 7, 2009 11:44pm GMT

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SHANGHAI Jan 8 (Reuters) - China's Ministry of Commerce may ask Chinese companies to apply for approval from the ministry if they want to invest $100 million or more overseas, it said in new draft rules published late on Wednesday, after a few major Chinese companies reported big book losses on investments abroad.

Companies may also need the ministry's approval if they want to invest in countries which have no diplomatic relations with China, foreign infrastructure projects or highly risky countries or regions, it said in new rules that were published to seek public feedback until Jan. 20.

Hit by the global financial crisis some Chinese firms have seen the value of their overseas investments dwindle, with the country's second biggest insurer, Ping An Insurance (Group) (2318.HK)(601318.SS), booking a loss of about 15.7 billion yuan ($2.3 billion) on its investment in Fortis NV FOR.BR FOR.AS.

The country's $200 billion sovereign wealth fund, the China Investment Corp (CIC), has also suffered heavy paper losses on its high-profile stakes in U.S. private equity firm Blackstone Group (BX.N) and bank Morgan Stanley (MS.N). ($1=6.834 Yuan) (Reporting by Lu Jianxin; Editing by Jonathan Hopfner)